RRIF Withdrawals: A Step-by-Step Strategy

The Registered Retirement Income Fund (RRIF) and its withdrawals are complex topics because each situation is different. Let’s provide you with guidelines and different scenarios so you have all the pointers you need to prepare for this big life transition.

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You’ll Learn

Let’s start with something easy. Simply put, a RRIF is a registered retirement account. How can we describe it in more detail?
Since the RRIF replaces the RRSP, how can we differentiate them? The main differences are in the minimum withdrawals and income-splitting rules.
Of course, RRIF withdrawals count as an income and are therefore taxed accordingly. Investors should also expect some fees.
How should investors prepare to receive RRIF withdrawals? A selling strategy is necessary. A cash reserve using the GICs ladder can also be useful.
Can investors use the three D’s of tax optimization for their RRIF withdrawals?
While they are not required to use it before 71, some investors transfer their RRSP into a RRIF sooner. Why should investors transfer their investments into a RRIF account?
When the time comes, how should retirees use their withdrawals? Should they take them as income or reinvest them in a tax-sheltered account?
To end the episode, let’s simplify all this, Mike. What is your step-by-step strategy for managing RRIF withdrawals? We share a simple 3-step methodology.

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