Key Takeaways
- Your RRSP must be wrapped up by December 31 of the year you turn 71 — converting to a RRIF is the option most Canadians choose.
- From the year after you open the RRIF, Ottawa sets a minimum you must withdraw each year: 5.28% of the balance at 71, rising to 20% at 95.
- No tax is withheld on the minimum itself, but every dollar out is taxable income.
The Deadline Nobody Can Move
Your RRSP has an expiry date. By December 31 of the year you turn 71, it has to be wrapped up. The Canada Revenue Agency gives you exactly three ways to do it: withdraw the money, use it to buy an annuity, or convert it into a Registered Retirement Income Fund — a RRIF.
Withdrawing it all at once is the option almost nobody should take. The entire balance becomes taxable income in a single year, and tax is withheld at source before you see a cent. An annuity gives you certainty but locks you in. The RRIF is the middle path most Canadians choose: your money stays invested, you keep control of it, and the deadline is replaced with a schedule — one set by Ottawa.
One point worth knowing before the deadline forces your hand: transferring an RRSP to a RRIF is not a taxable event. No tax is withheld on a direct transfer, and no tax is due until the money actually comes out.
The Minimum: Ottawa's Withdrawal Schedule
Starting the year after you open your RRIF, you must withdraw at least a minimum amount every year. The amount is calculated simply: the balance of your RRIF on January 1, multiplied by a percentage based on your age — the prescribed factor.
The percentages climb steeply with age:
- Age 71: 5.28%
- Age 75: 5.82%
- Age 80: 6.82%
- Age 85: 8.51%
- Age 90: 11.92%
- Age 95 and up: 20.00%
On a $100,000 RRIF, that means $5,280 must come out at 71 — and $11,920 at 90, whether you need the money or not. This is the problem many savers don't see coming: a large RRSP can become a forced-income machine in your eighties and nineties, which is why some Canadians withdraw from an RRSP earlier than they need to.
Two timing details can soften the schedule. First, there is no minimum in the year you open the RRIF — the clock only starts the following year. Second, if your spouse is younger, you can use their age instead of yours to calculate the minimum. You need to choose this when setting up your RRIF, and it can reduce every forced withdrawal for the life of the fund.
The Tax Rules That Catch People Out
Every dollar that leaves a RRIF counts as income — and is taxable in the year it comes out. But the withholding works in a way that surprises people: no tax is withheld on the minimum amount itself.
Withholding applies to amounts taken above the minimum, using the lump-sum rates that apply to RRSP withdrawals: 10% on amounts up to $5,000, 20% on amounts over $5,000 up to $15,000, and 30% on amounts over $15,000. Quebec residents face different federal rates (5%, 10% and 15%) plus provincial withholding.
No withholding does not mean no tax. If the minimum is your main retirement income, the amount required by December 31 may leave you owing tax at filing time — even though nothing was held back. That is worth planning for, especially in the first year.
RRIF income after 65 also counts as eligible pension income, which unlocks two valuable tools: the pension income amount, and pension splitting with a spouse. It is also the same decision window where many Canadians weigh when to start CPP — because the pension you delay and the RRIF you are forced to draw both interact on the same tax return.
One change is on the horizon, but it is not law yet: Budget 2026 announced the government's intention to create an "RRSP-for-life" that would remove the requirement to convert at 71 — while keeping the minimum withdrawals after 71 exactly as they are. Until legislation passes, the December 31 deadline still stands for the year you turn 71.
The Twikup Take
The RRIF rules reward people who plan a few years early. Convert to a RRIF by the deadline, use a younger spouse's age if you can, and remember the forced withdrawals will climb from 5.28% to 20%. The time to smooth that income is in your sixties, not your nineties. The RRIF clock is fixed; your only choice is whether you plan around it — or it plans around you.
Image: Illustrative image.