|
Q. What is an RRIF? |
A. An RRIF is an investment vehicle that provides you with regular income during your retirement while still allowing tax-sheltered capital growth. It is also an effective and flexible way to withdraw cash from investments formerly held in your RRSP. It provides inflation-adjusted income through your retirement or as long as you have assets in your RRIF.
|
 |
|
Q. What is the difference between an RRSP and an RRIF? |
A. An RRSP allows you to make tax-deductible contributions to the plan in the years prior to retirement; whereas, an RRIF allows you to make withdrawals from the plan to provide income during retirement.
|
An RRIF is an investment vehicle that provides you with regular income during your retirement while still allowing tax-sheltered capital growth. It is also an effective and flexible way to withdraw cash from investments formerly held in your RRSP. It provides inflation-adjusted income through your retirement or as long as you have assets in your RRIF.
|
|
Q. Can I contribute to an RRIF? |
A. No, you cannot contribute to an RRIF. You can only make withdrawals from an RRIF.
|
|
Q. Who is eligible to have an RRIF? |
A. Existing RRSP holders are eligible to convert this investment into an RRIF at any time. When you turn 69 years old, however, you must convert your RRSP into one of the following retirement income options: an RRIF, cash withdrawal, life annuity, or fixed-term annuity. You can also choose any combination of these options to meet your needs.
|
|
Q. How can I transfer assets from an RRSP to an RRIF? |
A. You don't have to sell any of the assets in your RRSP. Assets may be transferred in kind from your RRSP to an RRIF.
|
|
Q. What are the major benefits of an RRIF? |
A. One of the major benefits of an RRIF is flexibility. RRSPs can be converted into an RRIF at any time.
|
|
Q. How much can I withdraw from my RRIF each year? |
A. While Revenue Canada requires you to withdraw a minimum amount each year, you can take as much income as you need. The minimum withdrawal amount starts at 4.76% of the total value of the RRIF at age 69 and increases incrementally to 20% by age 94. You can adjust the amount and the frequency of the payments you receive. Monthly, quarterly, semi-annual or annual payments are all options - as are lump-sum withdrawals.
|
|
Q. What are the tax implications? |
A. As with an RRSP, funds held within an RRIF are sheltered from tax and may be invested in the same wide range of investments. When money is withdrawn from an RRIF, it is treated as income and taxed accordingly. By transferring your RRSP to an RRIF, you can defer the payment of taxes to the year in which you want to withdraw income from your RRIF.
|
|
Q. What about estate planning? |
A. RRIFs are an excellent choice for anyone concerned about estate planning because assets in the plan are automatically passed on to your beneficiaries in the event of your death. if you name your spouse or a financially dependent child under 18 as beneficiary, assets are passed on tax-free to the beneficiary's RRIF or RRSP.
|
webmail
help
my account
our services
Get Started Now!!
