Retirement Income Funds (RIF)

When you turn 71, you have some choices where your retirement savings are concerned.

A retirement income option that gives you security and control

The Canada Revenue Agency (CRA) requires you to convert your RSP to a retirement income option by December 31 of the year you turn 71. This can either be done with an annuity or a Retirement Income Fund (RIF).

With an annuity, you pay a lump sum up front, and get a guaranteed and fixed amount of money back each month for a set period of time. Annuity payments can continue for your lifetime, or for a chosen period of time.

With a RIF, your income options are more flexible, as you can make withdrawals as often as you like, and can withdraw more than the minimum amount set by the CRA – so you’re in control of your retirement income. Plus, your money will continue to grow tax-sheltered, meaning it keeps working for you.

Minimum income payments

You don’t contribute to a RIF – rather, you take minimum payments out every year. The amount of those payments is determined by a calculation based on your age and your assets. Payments can also be based on the age of your spouse. You can withdraw more than your minimum amount, if you like, and receive your payments according to your schedule – annually, semi-annually, quarterly or monthly.

Any retirement income – whether it’s from a RIF or an annuity – is considered taxable in the year it is withdrawn, so keep in mind it will be added to your other sources of income at tax time. RIF payments are also subject to a withholding tax, the amount of which varies depending on how much you withdraw and where you live.

New minimum withdrawal changes

In a recent federal government budget, the minimum percentage that you are required to withdraw from your RIF each year was changed. This is good news, as it means that seniors will be able to make their RIF last longer than before. The lower withdrawal rate lets you defer taxes that extra bit longer, and makes it easier to stay within a lower tax bracket for a greater portion of withdrawals, which can make your savings go that much further.

If you already have a RIF with Oaken, you won’t need to adjust the minimum amount that is withdrawn from your plan – we will do that for you automatically, starting in January 2016. However, if you do wish to withdraw an amount that is higher than the required minimum, please contact us and we’ll be happy to arrange that for you.

Current minimum withdrawal percentages

The table below lists the annual minimum withdrawal percentages as they stand today, including those resulting from the federal government budget changes announced in April 2015.

Age (at the start of the calendar year) New RIF factors (effective from 2015) Non-qualifying RIFs (purchased after 1993) Qualifying RIFs (purchased before 1993)
60 3.33% 3.33% 3.33%
61 3.45% 3.45% 3.45%
62 3.57% 3.57% 3.57%
63 3.70% 3.70% 3.70%
64 3.85% 3.85% 3.85%
65 4.00% 4.00% 4.00%
66 4.17% 4.17% 4.17%
67 4.35% 4.35% 4.35%
68 4.55% 4.55% 4.55%
69 4.76% 4.76% 4.76%
70 5.00% 5.00% 5.00%
71 5.28% 7.38% 5.26%
72 5.40% 7.48% 5.56%
73 5.53% 7.59% 5.88%
74 5.67% 7.71% 6.25%
75 5.82% 7.85% 6.67%
76 5.98% 7.99% 7.14%
77 6.17% 8.15% 7.69%
78 6.36% 8.33% 8.33%
79 6.58% 8.53% 8.53%
80 6.82% 8.75% 8.75%
81 7.08% 8.99% 8.99%
82 7.38% 9.27% 9.27%
83 7.71% 9.58% 9.58%
84 8.08% 9.93% 9.93%
85 8.51% 10.33% 10.33%
86 8.99% 10.79% 10.79%
87 9.55% 11.33% 11.33%
88 10.21% 11.96% 11.96%
89 10.99% 12.71% 12.71%
90 11.92% 13.62% 13.62%
91 13.06% 14.73% 14.73%
92 14.49% 16.12% 16.12%
93 16.34% 17.92% 17.92%
94 18.79% 20.00% 20.00%
95+ 20.00% 20.00% 20.00%

A RIF from Oaken

With a RIF from Oaken, the funds you transfer from your RSP can remain tax-sheltered while you continue to earn tax-deferred income, giving your savings the opportunity to keep growing. Plus, you benefit from the security provided by the guaranteed principal and interest features of our GICs that are eligible for Canada Deposit Insurance Corporation (CDIC) coverage, up to applicable limits.

Make the most of your retirement income with proven investment strategies

Creating a seamless income stream in retirement is something that many Canadians find challenging. One strategy to consider is to open multiple GICs across several terms – this way, your investments mature at different times, giving you access to funds over time instead of all at once.

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