Archive for Retirement Savings

RRIF Withdrawal Rules


What is an RRIF ?

Source: Wikipedia
Registered Retirement Income Fund (RRIF) is a tax deferred retirement plan registered under Canadian tax law. Individuals use an RRIF to generate income from the savings accumulated under their Registered Retirement Savings Plan (RRSP). I have written about RRSP Contribution Rules.

As with an RRSP, an RRIF is registered with the Canada Revenue Agency (CRA). RRIF income is completely tax sheltered inside your RRIF account, but all withdrawals are taxable.

Canadians have a few options with their RRSP before an individual reaches the end of their 71st year (or spouses age if younger). It is mandatory to either withdraw all funds from a RRSP plan, convert the RRSP to a RRIF or purchase a life annuity.

RRIF Withdrawal Rules

There are two primary differences between a RRSP and a RRIF. The first is that no further contributions can be made and second there is a minimum RRIF withdrawal.
The minimum RRIF withdrawal each year is determined by a percentage that is calculated by the account holder’s age and the total value of the plan on January 1 each year. There’s no limit to the maximum amount that can be withdrawn from a RRIF or an RRSP.

The table below shows the RRIF minimum payout percentages for different ages. As you can see, the annual percentage payouts gradually increase to age 95.

Age At Start Of Year.

65                       4.00%
66                       4.17%
67                       4.35%
68                       4.55%
69                       4.76%
70                       5.00%
71                       5.28%
72                       5.40%
73                       5.53%
74                       5.67%
75                       5.82%
76                       5.98%
77                       6.17%
78                       6.36%
79                       6.58%
80                       6.82%
Age At Start Of Year
RRIFs Set Up After The End Of 1992
81                      7.08%
82                      7.38%
83                      7.71%
84                      8.08%
85                      8.51%
86                      8.99%
87                      9.55%
88                     10.21%
89                     10.99%
90                     11.92%
91                     13.06%
92                     14.49%
93                     16.34%
94                     18.79%
95 and older     20.00%


RRIF are flexible

In your RRIF you can hold the same investments that are eligible for an RRSP, stocks, ETF, bonds, mortgages, GICs, options, warrants, rights, mutual funds etc. You can also hold foreign investments in your RRIF.
When you die you can leave your remaining RRIF assets to your designated beneficiary or estate.


There are a lot of issues to deal with when it comes to planning your retirement income. RRIF with pensions and annuities are an important part of the retirement process. Take the time to plan wisely. There is two good articles if you are interested that explain RRIF. Smartest things you can do with your RRSP at age 71/Jason Heath and Understanding RRIFs/Savvy New Canadian

Don’t wait for retirement to enjoy life !!

Old Age Security Rules (OAS)

Old Age Security Rules (OAS)

The first old-age pension was enacted by the Federal Parliament in 1927. It was jointly financed by Federal and Provincial Governments but administered by the provinces, as pensions were considered a provincial constitutional responsibility at that time. OAS has been amended many times since inception.

The Old Age Security (OAS) program is the biggest component in Canada’s Social Security system. It is a monthly sum of funds that helps provide a minimum quality of life for elderly Canadians.

The program is unrelated to employment history, in contrast to the Canada Pension Plan (CPP). OAS is funded out of the general revenues of the Government of Canada, which means that Canadians do not pay into it directly.


Eligibility for Old Age Security Pension

Source: Government Of Canada

The Old Age Security (OAS) pension is a monthly payment available to seniors aged 65 and older who meet the Canadian legal status and residence requirements.

1. You must be at least 65 years of age.
2. If living in Canada: You must be a Canadian citizen or legal resident and must have lived in Canada for at least 10 years since you turned 18.
3. If living outside Canada: You must have been a Canadian citizen or legal resident before you left Canada and must have resided in Canada for at least 20 years since you turned 18.
4. If you have lived in a country with which Canada has established a social security agreement.

Canadians working outside of Canada for Canadian employers

Canadians working outside Canada for Canadian employers, such as banks, and the armed forces, may have their time working abroad counted as residence in Canada. To qualify for the OAS pension, you must have returned to Canada within six months of ending employment or have turned 65 years old while still employed.

Deferring your Old Age Security pension

Since July 2013, you can defer receiving your OAS pension for up to 60 months (five years) after the date you become eligible for an OAS pension in exchange for a higher monthly amount.

If you delay receiving your OAS pension, your monthly pension payment will be increased by 0.6% for every month you delay receiving it, up to a maximum of 36% at age 70.

If you choose to defer receipt of your OAS pension, you will not be eligible for the Guaranteed Income Supplement (GIS) and your spouse or common-law partner will not be eligible for the allowance benefit for the period you are delaying your OAS pension.

How much could you receive

The amount of your Old Age Security (OAS) pension will be determined by how long you have lived in Canada after the age of 18.
To qualify for a full OAS pension, you must have lived in Canada for at least 40 years after age 18. The maximum as of March 2018 is $586.66

You will receive a partial pension benefit if you haven’t resided in Canada for the full 40 years. The partial pension benefit is 1/40th of the full pension amount for each complete year you lived in Canada after age 18
OAS benefits are adjusted quarterly, if there are increases in the cost of living as measured by the Consumer Price Index.

OAS Clawback

Your OAS benefit may be reduced by a clawback if your net income for the previous calendar year exceeds $75,910 (2018). If your net income exceeds this amount, you must pay back 15% on the excess income up to a maximum of the total OAS benefit received.

Final Thoughts

The OAS combined with your Canadian Pension Plan(CPP)Registered Retirement Savings Plan (RRSP) and Tax Free Savings Account (TFSA) will for the majority of Canadians finance their retirement needs. Taking the time to plan and understand how each works is a must for an accurate retirement plan.


Don’t wait for retirement to enjoy life !!