Changes to the RRIF Minimum


In the year you turn age 71, you must convert your RRSP funds to a RRIF, annuity, or cash out.  Converted to a RRIF, the plan must pay out a minimum of 7.38% of the value on January 1st. For example, if your account balance at December 31 was $100,000, you would be required to withdraw $7,380 the following year. The minimum withdrawal percentage continues to increase each year until it hits 20% at your age 94.  

The RRIF minimum was set in 1992 when interest rates were approximately 8% and life expectancy was approximately 4 years less than it is today.  This meant that you were not digging into your capital until your mid-80s.  Now for many individuals their RRIF balance starts to decrease right at age 71.

Clay Gillespie, our Managing Director, appeared before House of Commons Standing Committee on Finance in October 2014 to give a submission on behalf of CALU (Conference of Advanced Life Underwriting) asking the  Federal Government to update the RRIF rules to incorporate the lower interest rates and longer life expectancy.

Please see a link to the CALU submission. 

CALU has suggested 3 possible ways to update the RRIF minimum. 

Other information of interest

CD Howe Report

Moeshe Milevsky  - Strategic Financial Planning over the Lifecycle

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