What is a RRIF or RIF?
A Registered Retirement Income Fund is an investment account your Registered Retirement Savings Plan (RRSP) generally rolls into, for the purpose of receiving income as is legislated by December 31 of the year in which you turn 71. You can choose from several different options, including a cash withdrawal, a registered annuity, a Registered Retirement Income Fund (RRIF) or any combination of these.
One of the most common options is to transfer your RRSP or Locked-In RRSP/ Locked-in Retirement Account (LIRA) to a Retirement Income Fund (RIF) or Life Income Fund (LIF). With this approach, you can benefit from continuing tax deferral on the growth of your RRSP assets.
A Registered Retirement Income Fund (RRIF) is the investment account that the Canada Revenue Agency (CRA) registers. You transfer assets to the account held with the Financial Institution from an RRSP, a PRPP, an RPP, an SPP, or from another RRIF, and the Financial Institution makes payments to you.
The minimum amount must be paid to you in the year following the year the RRIF is entered into. Earnings in a RRIF are tax-free and amounts paid out of a RRIF are taxable on receipt.
Setting up your RIF
You can have more than one RRIF and you can have self-directed RRIFs. You may want to set up a self-directed RRIF if you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs. Once the RRIF is established, there can be no more contributions made to the plan nor can the plan be terminated except through death.
Transferring to your RIF
You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for self-directed RRSPs. For more information, see Self-directed RRSPs. You cannot transfer any part of your retirement allowance to a RRIF.
You can contribute to your RRIF by having property transferred directly from:
- your PRPP or unmatured RRSP;
- your matured RRSP, including a direct transfer of a commutation payment from your RRSP annuity; or
- an unmatured RRSP under which your current of former spouse or common-law partner is the annuitant
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