Converting your RRSP to a Registered Retirement Income Fund (RRIF) before age 71 is optional, but it can be a smart tax strategy if you're retired, want more flexible income, or expect lower tax rates now than later. You don't have to wait until age 71 when the conversion becomes mandatory. The key is understanding your personal tax situation, projected income needs, and how a RRIF's forced withdrawal rules affect your overall plan for 2026. Both are registered accounts that grow tax-deferred, but they work very differently: RRSP (Registered Retirement Savings Plan) - Contributions reduce your taxable income - No minimum withdrawals required - Growth is tax-sheltered indefinitely - You control when and how much to withdraw - At age 71, it must be converted (or closed) RRIF (Registered Retirement Income Fund) - You must withdraw a minimum amount each year (based on your age) - Growth remains tax-sheltered - Withdrawal amounts are taxed as income - More flexibility for larger withdrawals if needed - Can be opened at any age When you convert an RRSP to a RRIF, there's no immediate tax hit. You're simply changing the account structure.
No, the conversion itself is not a taxable event. However, any RRIF withdrawals you make are taxed as income in the year you receive them.
Yes, you can open a RRIF at any age. There's no minimum age requirement for conversion, though you may want to consider whether early withdrawals suit your financial plan.
The minimum is calculated using a percentage based on your age at the start of the year and your RRIF balance on January 1. At age 65, it's roughly 4%, rising to 20% by age 95.
No, once you convert a RRIF to a RRSP, the conversion is permanent. However, you can open a new RRSP and contribute to it as long as you have contribution room and earned income.
RRIF withdrawals count as income and can reduce or eliminate OAS if your income exceeds the threshold. Model your income carefully before converting if you expect to receive OAS soon.