age for converting rrsp to rrif
Prior to 2007, it was required that a Registered Retirement Savings Plan (RRSP) be converted to a Registered Retirement Income Fund (RRIF) by the end of the year in which the owner turned 69. The 2007 Federal budget revised this age to 71, for both RRSPs and RPPs. Tax Tip: Convert some of your RRSP to a RRIF at age 65 in order to take advantage of the pension income tax credit and pension income splitting with your spouse. Revised: September 08, 2015 The browser does not support JavaScript. Tax Tip: Convert some of your RRSP to a RRIF at age 65 in order to take advantage of the pension income tax credit and pension income splitting with your spouse. Revised: September 08, 2015 The browser does not support JavaScript. Please access the web page using another browser. For example, if you convert a $10,000 RRSP to a RRIF at 65 years old and want to deplete $2,000 a year from your RRIF to take advantage of the pension income amount, this makes sense and you can do this. Converting an RRSP to a RRIF You can convert your RRSP holdings to a RRIF at any time. However, an RRSP must be converted to a RRIF, annuity, or paid out in a lump sum by the end of the calendar year that you turn age 71. Converting Your RRSP to a RRIF. Prior to 2007, it was required that a Registered Retirement Savings Plan (RRSP) be converted to a Registered Retirement Income Fund (RRIF) by the end of the year in which the owner turned 69. The 2007 Federal budget revised this age to 71, for both RRSPs and RPPs. Transfer RRSP to a RRIF. At age 65 transfer $12,000 to a RRIF and take $2000 out per year from age 65 to 71(inclusive). This essentially allows you to get $2000 out of your RRSP tax-free for 6 years. Whether you need the income or not, it is an opportunity you do not want to miss. 1 You can have more than one RRIF account. 2  Some people create a small RRIF account at age 65 in order to make annual $2,000 withdrawals which will qualify for the pension credit. 3  You can make multiple transfers to the same RRIF acount from your RRSP account. The government requires RRSPs (personal and spousal) to be converted to a RRIF the year a person turns 71. After that, withdrawals begin and they’re taxed as income. Currently, annual minimum withdrawals start at 7.48% for those aged 71 and rise every year to a maximum of 20% for anyone 94 or older. 1 You can convert your RRSP to a RRIF anytime you want before the deadline. 2  One reason someone might convert early (ie at age 55) is so they can set up regular withdrawals from the account which most institutions won’t allow for RRSP accounts.
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