RRIF Withdrawal Rules Canada: Minimum Payments, Tax Strategy & Timing (2026)

What Is a RRIF?

A Registered Retirement Income Fund (RRIF) is a tax-deferred retirement account that holds investments from your RRSP. Unlike an RRSP — where you accumulate savings — a RRIF is a drawdown vehicle. You must withdraw a minimum amount every year, and those withdrawals are fully taxable as income.

The key fact: your RRSP must be converted to a RRIF by December 31st of the year you turn 71. You can convert earlier if you choose — many people do so at 65 or even sooner for strategic reasons — but 71 is the mandatory deadline. After conversion, you can no longer contribute to the RRIF.

Converting to a RRIF is not as dramatic as it sounds. Your investments don't have to change. The same ETFs, mutual funds, GICs, and bonds you held in your RRSP stay in the RRIF. The only difference is that you're now required to take money out each year — you can't let the account sit indefinitely.

Third option at 71: Instead of converting to a RRIF, you can also use your RRSP funds to purchase an annuity, or take the full amount as a lump-sum withdrawal (which would be fully taxable). For most Canadians, converting to a RRIF is the most flexible and tax-efficient choice.

RRIF Minimum Withdrawal Rates (2026)

Every year, you must withdraw at least a certain percentage of your RRIF's January 1st market value. The percentage increases as you age. These are the current rates following the 2015 federal budget reductions:

Age	Minimum Withdrawal %	Example: $500K RRIF
65	4.00%	$20,000/year
66	4.17%	$20,850/year
67	4.35%	$21,750/year
68	4.55%	$22,750/year
69	4.76%	$23,800/year
70	5.00%	$25,000/year
71	5.28%	$26,400/year
72	5.40%	$27,000/year
75	5.82%	$29,100/year
80	6.82%	$34,100/year
85	8.51%	$42,550/year
90	11.92%	$59,600/year
95+	20.00%	$100,000/year

Rates based on the current federal schedule following 2015 budget reductions. Your minimum is calculated on the January 1st value of your RRIF each year. In the first year of conversion, you may elect to skip the minimum withdrawal.

Important: You can always withdraw more than the minimum — but you cannot withdraw less. Withdrawals above the minimum are subject to additional withholding tax at source (10% for amounts up to $5,000; 20% for $5,001–$15,000; 30% for amounts above $15,000 in most provinces).

Tax Implications: Every Dollar Is Fully Taxable

There's no tax-free component to RRIF withdrawals. Every dollar you pull from a RRIF is added to your taxable income for that year, the same as employment income. This is by design — the government deferred tax when you contributed to your RRSP, and now it collects on the way out.

Key tax strategies:

Spread withdrawals across years to stay in lower tax brackets. Large one-time withdrawals push income higher, triggering higher marginal rates.
Convert and start withdrawing before 71 if it makes sense. Spreading RRIF income over more years (say, ages 65–85 vs 71–85) reduces annual withdrawal amounts and can keep you in a lower bracket.
Coordinate with your spouse's income. If one partner has a large RRIF and the other has minimal income, withdrawals can be timed to avoid pushing either into a higher bracket.
Pension income splitting: RRIF income qualifies for pension income splitting after age 65. You can attribute up to 50% of eligible pension income (including RRIF) to your spouse, which can significantly reduce the household tax bill.

Withholding tax reminder: The minimum annual RRIF withdrawal has no withholding tax applied at source — but don't mistake that for being tax-free. You'll still owe tax on it when you file. Plan accordingly and set aside funds if needed.

Spousal RRIF: Use Your Spouse's Age to Reduce Minimums

If you have a younger spouse or common-law partner, you have an important planning option: you can base your RRIF minimum withdrawal on their age instead of yours.

Because the minimum withdrawal percentage is lower for younger ages, basing it on a younger spouse's age means you're forced to withdraw less each year. Less withdrawal = less taxable income = more money staying tax-sheltered inside the RRIF to continue growing.

Example: You are 75 (minimum rate: 5.82%) and your spouse is 68 (minimum rate: 4.55%). By using your spouse's age, your required annual minimum drops from 5.82% to 4.55% of your RRIF value — a meaningful difference that compounds over time.

You must elect to use the spouse's age at the time you set up the RRIF — you generally cannot change this later.
This election doesn't affect who owns the RRIF or how it is taxed — withdrawals still go to you and are still taxed in your hands.
The spousal age election is most valuable if there's a significant age difference (5+ years).

Planning tip: If you're setting up a RRIF and have a younger spouse, always confirm with your financial institution whether to elect the younger spouse's age for minimum calculation. This is a one-time irrevocable election at many institutions.

OAS Clawback Risk: A Hidden RRIF Danger

Old Age Security (OAS) is reduced — "clawed back" — when your net income exceeds a threshold. For 2025, the clawback begins at $90,997 in net income. For every dollar above that threshold, you repay 15 cents of OAS. Your OAS is fully eliminated at roughly $148,000 in net income.

Because RRIF withdrawals count as income, a large RRIF can push you into clawback territory even if you have modest spending needs. This is one of the most overlooked retirement tax traps in Canada.

The RRSP meltdown strategy: The idea is to gradually withdraw from your RRSP (or RRIF) in the years before CPP and OAS start — typically ages 60–70 — and reinvest the after-tax amount in a TFSA. By reducing your RRSP/RRIF balance before government benefits kick in, you lower your forced RRIF withdrawals in later years and reduce OAS clawback exposure.

You pay tax now on RRSP/RRIF withdrawals, but at a lower rate than if you had both RRIF income + CPP + OAS stacked together.
The TFSA receives the after-tax proceeds and grows tax-free, with withdrawals that don't affect OAS.
Delaying CPP to age 70 (for the 42% enhancement) works well paired with RRSP meltdown between ages 60–70.

OAS clawback math: If your net income is $110,000, you're $19,003 over the threshold. You'd repay $2,850 in OAS (15% × $19,003). On a $7,700 maximum OAS benefit, that's a significant penalty — and it applies retroactively via your tax return.

For deeper strategy on bridging CPP and OAS, see our guide: CPP & OAS Bridge Investing Strategy →

RRIF vs Annuity: Which Is Right for You?

When your RRSP matures at 71, you have two main options beyond keeping a RRIF: purchase a life annuity from an insurance company. Here's how they compare:

✅ RRIF

You retain control of your investments
Money can continue to grow inside the account
Flexible — withdraw more when needed
Passes to spouse tax-free at death
Market risk: a bad decade hurts
Mandatory minimums increase over time
Requires ongoing management decisions

📋 Life Annuity

Guaranteed income for life — no longevity risk
No investment decisions required
Payments don't change with markets
You lose access to the capital
If you die early, payments stop (unless joint)
No inflation protection (unless indexed)
Current annuity rates depend on interest rates

Most Canadians keep a RRIF for flexibility and consider a partial annuity — converting a portion of RRIF assets to lock in a guaranteed floor of income. This hybrid approach balances security with flexibility.

Qualified Investments in a RRIF

A RRIF can hold the same investments as an RRSP. There's no need to change your investment mix simply because you've converted. Eligible investments include:

Canadian-listed and US-listed ETFs (note: US-listed ETFs in a RRIF benefit from the Canada-US tax treaty's withholding tax exemption — see our withholding tax guide)
Mutual funds
GICs and term deposits
Canadian and foreign bonds
Eligible Canadian and foreign stocks listed on major exchanges
Cash (Canadian and US dollars)

As you approach and enter retirement, many financial planners recommend gradually shifting your RRIF to a more conservative allocation — more bonds and GICs, fewer equities — to reduce the risk of forced selling during a market downturn to meet your minimum withdrawal. See our guide on mutual funds for retirees for specific fund recommendations.

What Happens to Your RRIF at Death?

This is one of the most important — and most often overlooked — aspects of RRIF planning.

If you have a surviving spouse or common-law partner: Your RRIF can be transferred to them tax-free as a "rollover." They become the new RRIF annuitant and continue withdrawals as before. No tax is triggered at the time of transfer.

If you have no surviving spouse: The entire fair market value of your RRIF at death is added to your taxable income on your final tax return. If your RRIF is worth $400,000 and you're in the top marginal bracket, your estate could owe $180,000+ in income tax. This is a common source of large, unexpected tax bills for estates.

Strategies to address RRIF death tax:

Gradual drawdown: Withdraw more from the RRIF earlier (while alive) to reduce the terminal balance, investing the after-tax proceeds in a TFSA.
Life insurance: Some Canadians use a permanent life insurance policy to fund the expected tax liability on their RRIF, so their estate passes intact to beneficiaries.
Charitable giving: A gift of RRIF assets to charity upon death can offset the terminal income inclusion and generate charitable tax credits.

Named beneficiary vs estate: Always name a beneficiary on your RRIF directly (a spouse, or a financially dependent child or grandchild). If the RRIF passes through your estate, it's subject to probate fees and can take longer to distribute. A direct beneficiary designation bypasses probate entirely.