There are three main destinations for the RRSP.
CRA identifies three choices. They can have very different cash-flow, tax, investment and estate effects, so the administrative deadline and the retirement-income decision are best considered before the final weeks of the year.
Five things to review before the year-end deadline
Income already arriving
How will RRSP or RRIF amounts combine with CPP, OAS, workplace pensions and work income?
Cash needed from savings
Will the household need regular withdrawals, occasional amounts or no immediate cash from the account?
Investment control
Would the person prefer to keep managing investments or exchange some savings for contracted payments?
Household and estate details
Spouse or partner, beneficiary, successor-annuitant and estate considerations may need review.
Provider timing
The financial institution may need forms and processing time before the calendar-year deadline.
The timing in plain language
The decision year and first required RRIF payment are different.
A simplified example
Moving an RRSP to a RRIF is not the same as spending it.
Robin completes a direct RRSP-to-RRIF transfer before the deadline. The investments remain inside a registered account, but the account now has an income purpose. Minimum withdrawals begin the following year and amounts paid from the RRIF are generally included in taxable income.
Robin compares the future RRIF minimum with the household’s spending and other income. The example shows why the deadline is an account transition—not a requirement to spend the entire RRSP at once.
See a first RRIF minimum example
A simplified example using the current age-71 factor
Assume Robin is 71 at the beginning of the first year in which a RRIF minimum is required. The RRIF is worth $400,000 at the start of that year. This example uses Robin’s own age and CRA’s current 5.28% factor for an “all other RRIF.”
The RRIF carrier must pay at least $21,120 during that year. Robin could arrange payments during the year, but the annual minimum is not necessarily the amount the household wants to spend. It is generally included in taxable income when paid.
Illustrative only. CRA factors, account category, opening value and an eligible spouse or common-law partner’s elected age can change the actual minimum. Confirm the amount with the RRIF carrier and CRA’s current factor table.Tax treatment depends on how the money moves
A direct transfer is different from withdrawing the money first.
CRA says an issuer does not withhold tax on an amount transferred directly to a RRIF or used directly to purchase an eligible annuity. Later RRIF or annuity payments are generally taxable when received. Withdrawing the RRSP directly generally brings the withdrawal into taxable income in the current year. This could result in a large tax bill in that year. The issuer generally withholds tax, but withholding at source may not equal the final tax for the year.
Related questions
A few useful follow-ups.
Must I cash out the entire RRSP at 71?
No. A direct RRIF transfer or an eligible annuity are among the available choices.
When do RRIF minimum payments begin?
The minimum must begin in the year after the RRIF is established.
Can a RRIF stay invested?
Yes. A RRIF can hold investments, subject to the account and provider’s rules, while required withdrawals are paid.
Should I wait until 71 to open a RRIF?
Not necessarily. A RRIF may be established earlier, but the cash-flow and tax effects should be reviewed first.
What happens if I do nothing by the deadline?
The account cannot remain an RRSP after the end of the year the owner turns 71. Ask the financial institution well before year-end how it handles an incomplete instruction and confirm the tax consequences.
Explore it in your plan
Place the RRSP-to-RRIF transition on your Canadian timeline.
See how registered withdrawals may overlap with pensions, OAS and spending. Confirm the actual transfer and tax consequences with the institution and current CRA information.
Official sources
These sources were reviewed July 29, 2026. Program rules and tax treatment can change; confirm the information that applies when acting.
- CRA: RRSP options when you turn 71 (opens in a new tab)
- CRA: Receiving income from an RRSP (opens in a new tab)
- CRA: RRIF prescribed-factor chart (opens in a new tab)
Retired Kevin is not affiliated with or endorsed by these organizations.