How a RRIF Works
A RRIF is a registered account that holds investments and makes regular payments to you. It is typically established by converting your RRSP, which must mature by December 31 of the year you turn 71.
Key Features
Mandatory Minimum Withdrawals
You must withdraw a minimum amount each year, calculated as a percentage of the RRIF's fair market value based on your age.
Tax-Deferred Growth
The remaining balance continues to grow tax-deferred.
Flexible Withdrawal Options
Choose monthly, quarterly, or annual payments.
Withholding Tax
Payments above the minimum are subject to withholding tax.
2025 Minimum Withdrawal Rates
Minimum annual RRIF withdrawals are set by the government as a percentage of the total value of the RRIF. As you age, the minimum withdrawal percentage increases.
The Government of Canada proposed a 25% reduction in the minimum withdrawal requirement for 2025, providing greater flexibility for retirees.
| Age | Minimum Withdrawal Percentage |
|---|---|
| 65 | 4.00% |
| 70 | 5.00% |
| 75 | 5.82% |
| 80 | 6.82% |
| 85 | 8.51% |
| 90 | 11.92% |
| 95+ | 20.00% |
Our RRIF Investment Approach
At Rennford, we manage RRIF portfolios with a focus on sustainability and stability. Our approach combines:
Income Generation
Investments designed to provide reliable, predictable cash flow.
Capital Preservation
Protection against market downturns that could impact your income stream.
Long-Term Growth
Maintaining growth potential to ensure your income keeps pace with inflation.
Liquidity Management
Ensuring sufficient liquid assets to meet minimum withdrawal requirements.
RRIF vs. Annuity: Choosing Your Income Path
| Features | RRIF | Annuity |
|---|---|---|
| Income Type | Flexible, based on portfolio performance | Guaranteed, fixed payments |
| Investment Control | You retain control | Insurer manages investments |
| Longevity Protection | Risk of outliving savings | Guaranteed lifetime income |
| Inflation Protection | Potential through growth investments | Typically fixed, limited protection |
| Estate Value | Remaining balance passes to heirs | Generally no residual value |
Many Canadians choose a combination of both — using a RRIF flexibility and an annuity for guaranteed income.