A Registered Retirement Income Fund is an investment account your Registered Retirement Savings Plan (RRSP) generally rolls into, for the purpose of receiving income as is legislated by December 31 of the year in which you turn 71. You can choose from several different options, including a cash withdrawal, a registered annuity, a Registered Retirement Income Fund (RRIF) or any combination of these.
One of the most common options is to transfer your RRSP or Locked-In RRSP/ Locked-in Retirement Account (LIRA) to a Retirement Income Fund (RIF) or Life Income Fund (LIF). With this approach, you can benefit from continuing tax deferral on the growth of your RRSP assets.
A Registered Retirement Income Fund (RRIF) is an arrangement between you and a Financial Institution that the Canada Revenue Agency registers. You transfer property to the carrier from an RRSP, a PRPP, an RPP, an SPP, or from another RRIF, and the carrier makes payments to you.
The minimum amount must be paid to you in the year following the year the RRIF is entered into. Earnings in a RRIF are tax-free and amounts paid out of a RRIF are taxable on receipt.
You can have more than one RRIF and you can have self-directed RRIFs. You may want to set up a self-directed RRIF if you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs. Once the RRIF is established, there can be no more contributions made to the plan nor can the plan be terminated except through death.
You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for self-directed RRSPs. For more information, see Self-directed RRSPs. You cannot transfer any part of your retirement allowance to a RRIF.
You can contribute to your RRIF by having property transferred directly from: