Converting from an RRSP to a RRIF

Conversion to a retirement income option from a RRSP is mandatory in the year in which the owner turns 71. For members holding Kawartha RRSP term deposits, the deposits will be converted intact into their RRIF, with the same interest rate and maturity date, or may be consolidated into blended investments for ease of portfolio management.

General Retirement Income Options At KCU

The Income Tax Act provides three retirement income options:
  •     Registered Retirement Income Fund (RRIF)
  •     Term Certain Annuity to Age 90 (TCA 90)

Life Annuity

RRIF's and life annuities provide an income that can last for the lifetime of you or your spouse. TCA 90s last until you or your younger spouse turn 90.

Funds which have been transferred from a pension plan are usually subject to pension legislation. You may be restricted to purchasing only life annuities with these funds. Some provinces have approved Life Income Funds (LIFs) and/or Locked-in Retirement Income Funds (LRIFs) for these funds as alternatives to life annuities.

General RRIF Options At KCU

You cannot contribute directly to a RRIF. Funds can be transferred from a RRSP, another RRIF, a Registered Pension Plan, or a commuted RRSP annuity.

Some RRIFs are similar to continuing an RRSP, with the exception that you must take some taxable payments from the RRIF. You can choose any payment level, as long as the total each year is at least equal to the mandatory minimum amount. There is no maximum payment level. With many RRIFs you can fluctuate your payments up or down above the minimum from year to year. Obviously the higher the payments you take, the sooner your funds will be depleted. RRIFs can continue for the lifetime of the holder or their spouse.

You withdraw money from the RRIF according to one of three options chosen by you:

  • The Minimum Payment Option, which guarantees you will receive payments from your RRIF for life
  • The Specified Amount Payment Option, which permits you to change the amount of payments form your RRIF from time to time
  • The Specified Term Payment Option, which enables you to choose payments over a fixed number of years


You must withdraw at least the "minimum payment" from your RRIF each year. Originally, RRIFs were to be depleted by the time you reach age 90. Recent tax law has changed that formula. For details on the minimum payment you must withdraw from your RRIF, check the chart below or talk to your credit union staff.

Spouse's Birth Date

  • You can elect to base your RRIF on your spouse's birthdate. You must make this election at the time you apply for your RRIF
  • If you choose the age of a younger spouse, your minimum payment will be lower; much lower when your spouse is younger than 71
  • If you select the age of an older spouse, your minimum payment will be higher without triggering withholding tax at source
  • If both RRIFs are based on the same birthdate, when one spouse passes away the survivor can combine two or more RRIFs into one, rather than having to continue with separate RRIFs
  • If you didn't make this election when you applied for your RRIF, or you marry later, you can transfer your RRIF to a new RRIF based on your spouse's age

Minimum Payment Option

The Simplest Formula to Meet Canada Revenue Agency's Requirements

No payment is required from your RRIF in the first year, however, Canada Revenue Agency requires that a minimum amount be paid out in following years. Choosing this option ensures that your RRIF will continue to generate funds for your lifetime (and that of your spouse if you choose).

RRIF Purchased prior to January 1, 1993:

 to age 78:  Value as of Jan. 1     90 - age at Jan. 1
 age 79 - 93  % of plan value at Jan. 1    (see following chart)
 age 94+  20% of plan value at Jan. 1

RRIF Purchased prior to January 1, 1993:

 to age 70:  Value as of Jan. 1    90 - age at Jan. 1
 age 79 - 93  % of plan value at Jan. 1    (see following chart)
 age 94+  20% of plan value at Jan. 1
The percentages are applied to the value of your RRIF at the beginning of the year, according to your age at that time. Following is a chart showing a comparison of the two calculations:

Your Age RRIF Funded Before 1/1/93 RRIF - Funded After 31/12/92

 Age  %  %
 69  4.76  4.76
 70  5.00  5.00
 71  5.26  7.38
 72  5.56  7.48
 73  5.88  7.59
 74  6.25  7.71
 75  6.67  7.85
 76  7.14  7.99
 77  7.69  8.15

From age 78 on, the Minimum Payment from RRIFs is calculated according to the following formula:

 Age  %  Age  %
 87  11.33
 79  8.53  88  11.97
 80  8.75  89  12.71
 81  8.99  90  13.62
 82  9.27  91  14.73
 83  9.58  92  16.12
 84  9.93  93  17.92
 85  10.33  94 & older  20.00
 86  10.79    

Minimum Payment, Age 71 to 77

If the age at the beginning of the year is from 71 to 77, the minimum payment depends on whether the RRIF was first funded before or after January 1, 1993.