Converting an RRSP to a RRIF
The age-71 deadline, RRIF vs annuity, why many convert some at 65, the spouse-age and successor choices, and the tax ahead.
The short version
- Your RRSP has to end by December 31 of the year you turn 71. Convert it to a RRIF or buy an annuity, or the whole balance is taxed as income that year.
- Converting is tax-free: same investments, new account type. Tax comes later, as you withdraw.
- A RRIF has a minimum withdrawal every year after the first, a percentage of the January 1 value that rises with age.
- From 65, RRIF payments count as pension income: they qualify for the $2,000 pension income amount and can be split with your spouse. RRSP withdrawals don't.
- You don't have to wait for 71. Converting part or all of it earlier is allowed, and often smart at 65.
Converting an RRSP to a RRIF
At 71 the government stops letting your RRSP grow untaxed and starts insisting on its share, a little each year. The RRIF is how that happens politely. It's the same money, same investments, same institution; only the direction changes, from going in to coming out. The decisions around it (when, how much, which age to use) are where the tax is saved or lost.
Your Three Choices at 71
| Option | Tax | Fits when |
|---|---|---|
| Convert to a RRIF | None on conversion; withdrawals taxed as received | Most people: you keep control of the investments and the timing above the minimum |
| Buy a life annuity | None on purchase; payments taxed as received | You want a guaranteed income for life and don't want to manage investments |
| Cash it out | The whole balance is income this year | Almost never, unless the balance is small |
You can mix them: part to a RRIF, part to an annuity. A locked-in account (LIRA) goes to a LIF instead, with a maximum as well as a minimum.
When should you convert, and how much?
Tell the assistant your age, your spouse's age, the RRSP balance, your pensions and province. It compares converting now with waiting, and shows the minimum and tax each way.
Why Many People Convert at 65
- The pension income amount: RRIF payments from 65 qualify for the $2,000 federal pension income amount, worth $280 federally plus a provincial credit (about $91 in Ontario). With no employer pension, that credit is wasted unless you create pension income; see pension income amount.
- Pension splitting: up to half of RRIF income can be moved to a spouse's return from 65; see pension income splitting.
- No withholding on the minimum: regular RRSP withdrawals have 10% to 30% held back; RRIF minimums don't. See RRSP withdrawals.
A common move: convert just enough at 65 to pay out $2,000 a year and leave the rest in the RRSP until 71.
Decisions When You Set Up the RRIF
- Whose age: you can base the minimum on your younger spouse's age. It lowers the minimum for life, and you can't change it later. See RRIF withdrawal rules.
- Successor annuitant: naming your spouse lets the RRIF continue in their name at your death, with no tax then. Otherwise the whole balance is usually income on your final return; see the final return.
- Payment schedule: monthly, quarterly or yearly. Taking the minimum in December keeps the money sheltered longer.
- Last RRSP contribution: if you have earned income in the year you turn 71, there are end-of-year contribution moves worth asking an advisor about. A spousal RRSP is still open to you until the end of the year your spouse turns 71.
The Tax Bill Ahead
Every RRIF dollar is taxed as income, and the minimum grows each year. Combined with CPP and OAS, a large RRIF can push income into the OAS clawback. See your own minimum in the RRIF minimum calculator and the total tax in the retirement income tax calculator. The bigger picture is on retirement taxes.
RRSP vs RRIF: The Difference
| RRSP | RRIF | |
|---|---|---|
| Purpose | Saving | Paying out |
| New contributions | Yes, until the end of the year you turn 71 | No |
| Withdrawals | Any amount, with 10% to 30% withheld | A minimum each year from the year after you open it; no withholding on the minimum |
| Pension credit and splitting at 65+ | No (lump withdrawals) | Yes |
Same investments, same tax shelter; the difference is direction. Withdrawals and withholding: RRSP withdrawals and RRIF withdrawals.
RRSP to RRIF Questions
When do I have to convert my RRSP to a RRIF?
By December 31 of the year you turn 71. You can convert to a RRIF, buy an annuity, or withdraw the funds, which makes the whole amount taxable that year.
Is converting an RRSP to a RRIF taxable?
No. The transfer is tax-free. You pay tax only on amounts withdrawn from the RRIF.
Can I convert my RRSP to a RRIF before 71?
Yes. You can convert part or all of it at any age. Many people convert some at 65 so RRIF payments qualify for the pension income amount and pension splitting.
When do RRIF minimum withdrawals start?
In the calendar year after the RRIF is set up. There is no minimum in the first year.
Can I use my spouse’s age for my RRIF minimum?
Yes, if you choose it when you set up the RRIF and before any payment. Using a younger spouse’s age lowers the minimum, and the choice cannot be changed later.
What is the difference between an RRSP and a RRIF?
An RRSP is for saving and accepts contributions until the end of the year you turn 71. A RRIF is for paying out: no new contributions, a minimum withdrawal each year, no withholding on the minimum, and RRIF income qualifies for the pension credit and pension splitting from 65.
Sources: CRA, Registered retirement income fund (RRIF); Guide T4040, RRSPs and other registered plans for retirement. Checked October 2026. Credit values use 2026 federal and Ontario amounts. LIF rules are provincial or federal depending on where the pension came from; we cover them only briefly.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.