When you turn 65, your RRSP must convert to a Registered Retirement Income Fund (RRIF) by December 31st of that year. Your TFSA has no conversion requirement and can continue growing tax-free indefinitely. The key difference is that RRIFs force you to withdraw a minimum amount each year (starting at 4% of the account value at age 65, increasing with age), while TFSAs let you withdraw only what you need. Understanding these rules helps you plan a tax-efficient retirement income strategy. When you reach 65, the CRA requires you to convert your RRSP into a RRIF. This isn't optional, and missing the deadline can result in your RRSP being deregistered, making the entire balance taxable income in that year. Key points about RRIF conversion: - Your RRSP assets transfer into a RRIF with the same investments intact - The conversion itself is not a taxable event - You begin taking mandatory minimum withdrawals in the year you turn 65 - Minimum withdrawal amounts increase automatically as you age - Any amount you withdraw beyond the minimum is your choice You can also convert your RRSP earlier if you wish (some people convert at 60 or 62), but age 65 is
Yes, this CRA rule requires conversion by December 31st of the year you turn 65. The conversion itself is not taxable, but you must begin taking mandatory withdrawals that year.
Yes, you can convert at any age. Some people convert earlier to have more control over withdrawals, but the conversion becomes mandatory at 65.
Nothing changes. Your TFSA has no age restrictions, no conversion requirement, and no mandatory withdrawals. It continues to grow tax-free for as long as you want.
Yes, all RRIF withdrawals are added to your income and taxed at your marginal rate. TFSA withdrawals are never taxable, making them valuable for tax-efficient retirement income.
Withdraw from your TFSA first to keep taxable income low, which preserves income-tested benefits. Use forced RRIF minimums as your main income, and reinvest any excess into your TFSA if you have room.