RRIF Withdrawal Rules: Why Your Minimum Rises Every Year
A registered retirement income fund is built to empty out, so the natural expectation is that the payments shrink along with the balance. For more than two decades, they do the opposite. Take a $500,000 RRIF converted at 71 and drawn at the minimum every year. Our calculator’s projection, assuming a 4% annual return and minimum-only withdrawals, has the payment starting at $26,400 and still climbing at age 94, when it reaches $30,146, while the fund itself shrinks the whole way. The prescribed factor rises faster than the balance falls.
That shape is the thing to understand about the RRIF withdrawal rules, because everything downstream follows from it: your taxable income in your eighties, the pace at which you are forced to sell, and how much planning room you have left once the account is open.
What follows: the deadline at 71 and the choices it forces, how the minimum is actually computed, why the dollar amount climbs, the withholding rule that turns up as a bill in April, and the one election that cannot be changed after the first payment.
Factors are from section 7308 of the Income Tax Regulations, current to June 21, 2026 and last amended June 18, 2026. Dollar amounts below are illustrative arithmetic on the balances stated.
The deadline at 71 and the three ways through it
December 31 of the year you turn 71 is the last day you can contribute to your own RRSP. The whole calendar year you turn 71 is available to you, whatever month the birthday falls in.
By that date the plan has to become something else, and there are three permitted destinations:
- Withdraw the whole thing in cash. It is fully taxable, and tax is withheld.
- Transfer it to a RRIF. A direct transfer has no tax withheld and triggers no immediate tax.
- Buy an annuity, which gets the same treatment as the RRIF transfer.
You can also mix all three, splitting one RRSP across a RRIF, an annuity and a cash withdrawal.
What you cannot do is nothing. Letting the deadline pass de-registers the plan, and the entire fair market value becomes income in a single year. That is the worst outcome the rules permit, and it is entirely avoidable.
It also helps to be clear about what the RRIF transfer is not. It is not a closure or a liquidation. The investments carry on inside the new account. What changes is that contributions stop and withdrawals start.
How the minimum is calculated
The minimum begins in the year after the year you establish the RRIF. In the first calendar year of the account, the minimum is nil, which is why a conversion late in the year you turn 71 produces no required payment until the following year.
After that, the arithmetic is mechanical and your carrier does it for you, as the Canada Revenue Agency sets out in its guidance on receiving income from a RRIF. Two inputs, both fixed at the start of the year: your age at the beginning of the year, which selects the factor, and the fair market value of the fund at the start of the year, which the factor is applied to.
You can always take more than the minimum. You can never take less, and on an ordinary RRIF there is no maximum at all.
The factor table
The factors sit in section 7308(4) of the Income Tax Regulations and apply to every RRIF except the pre-1993 funds described further down. Below 71, the factor is 1 divided by 90 minus your age.
| Age at start of year | Factor | On a $500,000 RRIF |
|---|---|---|
| 65 | 4.00% (1/(90-65)) | $20,000 |
| 71 | 5.28% | $26,400 |
| 75 | 5.82% | $29,100 |
| 80 | 6.82% | $34,100 |
| 85 | 8.51% | $42,550 |
| 90 | 11.92% | $59,600 |
| 95 or older | 20.00% | $100,000 |
The dollar column is illustrative arithmetic, the factor multiplied by $500,000, not a projection of any real account.
Nothing forces you to wait for 71, either. An earlier conversion is allowed, and below 71 the 1 divided by 90 minus age formula applies, so a 65-year-old with $500,000 in a RRIF has a $20,000 minimum. Partial conversions are permitted too, so you can move part of an RRSP into a RRIF and leave the rest where it is.
Why the dollar amount climbs while the fund shrinks
Read down the factor column and the reason for the rising payment is visible. The percentage more than doubles between 71 and 90 and nearly quadruples by 95. The balance it applies to is falling, because money is leaving every year, but for a long stretch the percentage rises faster than the balance falls.
That is what produces the projection at the top of this piece. On a $500,000 RRIF converted at 71 and drawn at the minimum, assuming a 4% annual return, our calculator’s projection has the payment starting at $26,400 and climbing to $30,146 at age 94 before it finally turns down. More than twenty years of increases from an account whose entire purpose is to run dry.
The planning consequence is straightforward. If you are budgeting on the assumption that forced RRIF income tapers off in your eighties, the arithmetic disagrees, and taxable income that keeps rising for two decades is a different retirement plan from one that fades. To put your own age and balance through it, use our RRIF minimum withdrawal calculator, which handles the spousal election and the projection as well as the single-year number.
No tax is withheld on the minimum
This is the part that catches people, and it is worth stating flatly. No tax is withheld on the minimum amount. The money arrives in full.
It is still fully taxable income on your return. The tax has not been forgiven, only deferred to filing season, which means a retiree living on RRIF minimums can face a large balance owing in April unless they ask their carrier to withhold voluntarily.
Anything you take above the minimum is treated differently. Tax is withheld on the excess, as CRA Guide T4040 sets out in its Chart 5. The rates that apply to RRIF excess amounts are not something to quote from memory, so confirm them with your carrier before you size a large withdrawal.
The spousal age election, which you get one chance at
You may base the minimum on your spouse’s or common-law partner’s age instead of your own. A younger spouse means a lower factor, which means a lower forced withdrawal, permanently.
The worked example is stark. A $400,000 RRIF held by someone aged 78 has a minimum of $25,440, a factor of 6.36%. Elect a spouse aged 66 and the factor becomes 1 divided by 90 minus 66, which is 4.1667%, and the minimum drops to $16,667. In this case the election cuts the forced withdrawal by roughly a third, and it keeps doing so for the life of the account.
The catch is the timing. The election has to be made on the original RRIF application, before any payment is made, and once made it cannot be changed. There is no fixing it in year three when the tax bill arrives. If there is one line on the account-opening form worth slowing down for, this is it.
Two footnotes
Pre-1993 funds. A “qualifying” RRIF, meaning one entered into before 1993 with nothing paid in since 1992, uses a different subsection of the same regulation. There the 1 divided by 90 minus age formula runs to under 72, so at 71 the factor is 1/19, or 5.263%, instead of 5.28%. On $500,000 that is $26,315.79 against $26,400, a difference of $84.21, at exactly one age. From 72 onward the two tables are identical. A small and shrinking group of accounts, and a small difference even for them.
Locked-in accounts. A LIF, holding money that came from a pension, uses this same federal minimum but also carries a provincial or federal maximum on top of it. That is a separate set of rules and this piece does not cover them.
What to do with this
The rules themselves leave two decisions genuinely open.
The first is whether to start drawing the RRSP down before 71 rather than after. The conversion deadline does not care about your tax bracket, and once the minimum begins it is compulsory and rising. Our full RRSP guide takes up that question at depth, along with the conversion deadline and the withholding table that applies to RRSP withdrawals, including the case for pulling income forward before the RRIF minimum and the OAS clawback arrive at the same time.
The second is what the fund actually holds. The minimum has to be paid every year regardless of what markets did that January, which puts the composition of the account in front of you annually rather than occasionally. Our page on Canadian dividend stocks is where we track income-paying names for readers weighing that side of it.
Frequently asked questions
Do I have to convert my RRSP at 71? You have to do something by December 31 of the year you turn 71: withdraw it, transfer it to a RRIF, buy an annuity, or some combination of the three. Leaving it alone de-registers the plan and makes the entire fair market value taxable in one year.
Can I take more than the RRIF minimum? Yes. There is no maximum on an ordinary RRIF. Tax is withheld on the portion above the minimum, and nothing is withheld on the minimum itself.
Does the minimum change if my RRIF falls in value during the year? No. The factor is set by your age at the beginning of the year and applied to the fund’s fair market value at the start of the year. Both inputs are fixed at the start of the year, so a decline afterward does not reduce that year’s required payment.
What if my spouse is younger than me? You can elect to use their age for the minimum calculation, which lowers the factor for life. The election must be made on the original RRIF application before any payment is made, and it cannot be changed afterward.
Confirm your own minimum with your RRIF carrier or a tax professional.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Withdrawal factors from the Income Tax Regulations, section 7308, current to June 21, 2026; mechanics from the CRA’s Receiving income from a RRIF page and Guide T4040 Chart 5.
