How to manage your RRSP when approaching retirement

The year you turn 71, your Registered Retirement Savings Plan (RRSP) requires action! After December 31, you can no longer make contributions to your account.*

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Here are the options for what to do with your RRSP the year you turn 71:

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1. Convert your RRSP to a RRIF

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A Registered Retirement Income Fund (RRIF) is an account designed to provide you with a source of income for when you are retired. It is usually made up of funds that roll over from your RRSP.

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A direct transfer to a RRIF allows your savings to remain invested on a tax-deferred basis. Minimum taxable withdrawals begin the following calendar year.

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2. Withdraw your RRSP

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You can withdraw some or all of your RRSP. The withdrawal is taxable income, and withholding tax will apply. The amount withheld may not cover your final tax obligation. In January, a T4RSP tax slip will be sent to include with your income tax return for the year.

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3. Purchase an eligible annuity

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You can use your RRSP funds to purchase an eligible annuity that provides taxable income for life or for a specified period.

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4. Transfer your RRSP funds elsewhere

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If you already have a RRIF at another financial institution, you can request a direct transfer of your RRSP to that account. A properly completed direct transfer generally does not create an immediate taxable withdrawal.

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If you’d like to choose this option, send us the completed transfer documents by December 1 of the year you turn 71 to allow time for processing before December 31.

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We can help

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Managing your RRSP isn’t a one-size-fits-all process. What you decide can affect your retirement income, taxes, and income-tested government benefits.

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Meet with a Cambrian advisor to review your RRSP and RRIF options and build a retirement income plan that works for you.

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*You may still contribute to a spousal or common-law partner RRSP if your spouse or partner is 71 or younger on December 31 of the contribution year and you have available RRSP deduction room.

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This information is provided for general educational purposes and does not constitute tax, legal, or investment advice. Rules may change, and individual circumstances vary. Consult a qualified tax, legal or investment professional before making a decision.