When you reach retirement and it comes time to take regular income out of your RRSPs, the vehicle of choice is the Registered Retirement Income Fund (RRIF). Although you can make withdrawals from a RRSP, the point of a RRSP is to accumulate funds for retirement. That’s why they call it a savings plan.

The RRIF is much like an RRSP from the perspective that you can invest in lots of different things like GICs, bonds, mutual funds, stocks, etc. As long as the money stays in the account, whether it is a RRSP or RRIF, the money continues to grow tax deferred. The RRIF differs from an RRSP in that you cannot put direct contributions into a RRIF and with a RRIF, you must take out a minimum amount each and every year. This is called the Minimum Income.

How is the minimum income determined?

Here’s the formula for the minimum income on the RRIF:

1 / (90- age)

For example, if you are 65 years of age, 90 minus 65 is 25. One over 25 is 4%. At 65, you must take out at least 4% of the RRIF balance at the beginning of the year in income. If you had $100,000 in the RRIF, you would need to take out at least $4000.

Age Minimum
65 4.00%
66 4.17%
67 4.35%
68 4.55%
69 4.76%
70 5.00%
71 7.38%
72 7.48%
73 7.59%
74 7.71%
75 7.85%
76 7.99%
77 8.15%
78 8.33%
79 8.53%
80 8.75%
81 8.99%
82 9.27%
83 9.58%
84 9.93%
85 10.33%
86 10.79%
87 11.33%
88 11.96%
89 12.71%
90 13.62%
91 14.73%
92 16.12%

You can see that at age 71, the minimum income jumps dramatically to 7.38% and no longer follow the formula 1/(90-age). At 71, the minimum income amount is predetermined by the government. You can see that as you get older, the minimum percentage increases.

For more information on RRIFs, check out one of Jim’s most popular articles: