A Registered Retirement Income Fund (RRIF) is simply an evolution of an RRSP. You have to convert your RRSP into a RRIF by December 31st of the year you turn 71. Then you withdraw from your RRIF throughout retirement. Withdrawals are based on your financial needs, with a minimum percentage set by the government each year.
While you don’t contribute to a RRIF, the money in it still earns interest. Like an RRSP, the interest you earn in a RRIF is sheltered from tax. Also, similar to an RRSP, taxes are paid when money is withdrawn from the account.
A RRIF can be invested in a variety of products like GICs, savings accounts, Mutual Funds*, ETFs*, and Index-Linked GICs*. The choice is very personalized, a PenFinancial Advisor can help you.
RRIFs have important withdrawal rules. You have to withdraw a minimum amount from your RRIF every year, and to avoid extra fees, you also have to ensure you have enough money available in your account to make any additional withdrawals.
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