What is a RRIF, and when does it typically become relevant?

• A. A RRIF is a loan instrument used to borrow for retirement; it becomes relevant after age 50.
• B. A Registered Retirement Income Fund used to convert RRSP assets into retirement income, with minimum annual withdrawals starting by age 71.
• C. A RRIF is a type of investment that grows tax-free until death.
• D. A RRIF is only used to pay for education expenses.

Answer: (B)

A RRIF is a Registered Retirement Income Fund. It serves to convert RRSP assets into a retirement income stream, so your savings can be paid out gradually in retirement. Money inside a RRIF continues to grow tax-deferred, but you must withdraw a minimum amount each year. Those minimum withdrawals are set by government rules and typically begin around age 71, ensuring the funds are gradually emptied as you age. Withdrawals are included in your taxable income for the year, while the remaining assets stay inside the RRIF until withdrawn. You can’t contribute to a RRIF, though you can name beneficiaries. The RRIF becomes relevant when you shift from saving for retirement to taking retirement income—usually around age 71, when you convert your RRSP to a RRIF (or another income vehicle) and begin these mandatory withdrawals. It’s not a loan, not a tax-free growth vehicle, and not used for education expenses.