Retirement income options

Your RRSP is a wonderful way to save for retirement. Eventually, however, your RRSP will mature. You may only keep your RRSP until December 31 of the year you turn 71. If you need income sooner, you may want to withdraw or convert your RRSP earlier.

You have three maturity options for your RRSP to consider:

  • convert into a Registered Retirement Income Fund (RRIF)
  • purchase an annuity
  • withdraw

You do not have to choose just one of these options - you can combine two or more of them.

Which option is right for you?

Most people convert their RRSPs to RRIFs. But it should not be an automatic choice. Your best retirement income options can depend on many factors, like your

  • health
  • other retirement income sources
  • projected income tax bracket
  • need for ready cash for lump-sum or emergency expenses
  • need for inflation protection
  • estate planning goals
  • desire to control how your funds are invested
  • need for predictable income

When should you decide?

You should pick one or more options if:

  • you turned age 71 this year
  • you need regular income and want to use your RRSP
  • you are at least age 65 and don't already have income that qualifies for the Pension Income Credit
  • you are at least age 65 and want to create income you can share with your spouse, using Pension Income Splitting rules
  • withdrawing now means paying less tax, and/or keeping more government benefits (such as Old Age Security or Guaranteed Income Supplement), than delaying withdrawals until later

Don't leave your decision to the last minute. Give yourself time to weigh your options. One of our investment professionals would be pleased to help you decide when and how to convert your RRSP to a form of retirement income. A little expert advice and planning will give you peace of mind to enjoy your retirement.