Should I wait to “RRIF” my RRSP?

"RIFF-ing" your RRSP, as we often call it, involves turning your RRSP investment account into a steady income. Once you start the process, you are required to take the annual minimums each year; so, choosing the best timing is important.

Conventional financial planning often calls for waiting until the funds are needed. However, this recommendation does vary based on whether you have a fully funded pension at work, a spouse, and how leaving an inheritance ranks on your list of priorities.

Many know that RRSP and RRIF accounts are fully taxable at the death of the last spouse, which can result in a big tax bill. But, from experience working with a variety of people and cultures, that is not always the biggest concern.

If maximizing your retirement income while you are healthy is a top priority, your retirement plan may involve starting to draw from your RRSP earlier than some; all while ensuring that you build guaranteed income sources into your plan to cover you if you live a long healthy life, require long-term care, or have other unexpected expenses to cover. Those guaranteed income sources are typically made up of: workplace pension plans; annuities; CPP, and Old Age Security.

Give us a shout if you'd like to build a Retirement Income Plan that prioritizes spending your money on things that matter. Don't forget, that is probably why you made the RRSP contributions in the first place.