RRIF minimum withdrawals & the age-71 conversion

You must convert your RRSP to a RRIF (or annuity) by the end of the year you turn 71. Each year after, you must withdraw a prescribed minimum — about 5.28% at 71, rising to 20% at 95 — and it is taxed as ordinary income. You can always withdraw more, and you can convert earlier if you want the income.

• What a RRIF is and the age-71 deadline
• How the minimum withdrawal factor works
• The spousal-age election
• Withholding tax vs your actual tax bill
• The RRSP meltdown strategy
• RRIFs and the OAS clawback
• Locked-in accounts: LIRA and LIF
• A planning checklist and FAQs

A Registered Retirement Income Fund is the payout version of an RRSP. The investments carry over untouched; what changes is that you can no longer contribute, and you must withdraw a minimum amount each year that is taxed as ordinary income. You must convert your RRSP to a RRIF (or an annuity) by December 31 of the year you turn 71. You can convert earlier if you want the income, and you can hold a RRIF at any age if you retire early.

Each year you must withdraw a prescribed percentage of the RRIF's value as of January 1. The percentage climbs with age:

Before age 71 the factor follows the formula 1 ÷ (90 − age). There is no maximum on a RRIF — you can always withdraw more than the minimum; the rule only sets the floor. Because the minimum is a percentage of a rising or falling balance, strong markets can push your required (and taxable) withdrawal higher than you expected. Test the schedule in the contributions optimizer and the year-by-year cash-flow projection.

If you have a younger spouse or common-law partner, you can elect — when you open the RRIF — to calculate minimums based on their age rather than yours. A younger age means a smaller minimum, which means less forced taxable income each year and more money left compounding tax-sheltered. The election is irrevocable for that RRIF, so it is a set-once decision worth modelling first. Our tools support the younger-spouse election.

The annual minimum can be paid out with no tax withheld at source. Anything above the minimum is subject to withholding tax that rises in tiers (roughly 10% on the first $5,000 of excess, 20% up to $15,000, and 30% beyond, federally; higher in Quebec). Withholding is only a prepayment against your final tax — if too much is withheld you get it back at filing, and if too little is withheld you owe the difference. Do not confuse withholding with your true marginal rate.

A large RRSP is a deferred tax bill. Left alone until 71, it can generate big mandatory RRIF withdrawals in your 70s and 80s that stack on top of CPP, OAS, and pensions — pushing you into higher brackets and the OAS clawback exactly when you have least flexibility. The meltdown approach deliberately withdraws from the RRSP/RRIF earlier, in your 60s, while your other income is low, to:

• Fill up low tax brackets that would otherwise go unused;
• Shrink the registered balance that later drives large mandatory minimums;
• Reduce lifetime tax and OAS clawback, and leave a cleaner estate.

The meltdown is not free — you pay tax sooner and give up some tax-sheltered growth — so it only wins in the right circumstances. The withdrawal sequencer compares a meltdown against standard drawdown on your own numbers.

RRIF withdrawals are fully taxable and count toward the net income that drives the OAS recovery tax. For retirees with large registered balances, the interaction between rising RRIF minimums and the clawback threshold (~$95,323 for 2026) is often the single biggest tax issue of their retirement. Levers include smoothing withdrawals, the meltdown, the younger-spouse election, and pension income splitting — RRIF income qualifies for splitting once you are 65.

Money from a former employer's pension often lands in a LIRA (Locked-In Retirement Account), the locked-in cousin of an RRSP. Its payout version is a LIF (Life Income Fund), the locked-in cousin of a RRIF. A LIF works like a RRIF with one key difference: in addition to a minimum withdrawal, it also has a maximum annual withdrawal set by pension rules, and those limits vary by jurisdiction (federal vs each province). Some jurisdictions also allow a one-time partial unlocking. If you have locked-in money, confirm the rules for your specific jurisdiction, because they differ meaningfully.

• Know your conversion deadline (end of the year you turn 71).
• Decide whether to use the younger-spouse election before opening the RRIF.
• Project the minimums to see if they push you toward the OAS clawback.
• Consider whether a 60s meltdown lowers lifetime tax in your case.
• Coordinate RRIF income with CPP/OAS timing and pension splitting.