RRIFs

What is a RRIF?

You’ve worked hard to save for your retirement, and now that you’ve reached it, it’s time for your RRSP’s to start paying you! A Registered Retirement Income Fund puts you in control of your investment and the amount of income it pays you. The RRIF is one of the most flexible options for your RRSP, allowing you to set the payment amount, frequency and investment options. The investment options available for your RRIF include a variable rate, fixed terms of 1 – 5 years, mutual funds, stocks and bonds* and more.

When do I begin to make withdrawals?

While many people begin to make larger withdrawals from their RRIF when they retire at age 60 or 65, if you have not done so by age 71, then it’s time to start. You must change your RRSP to a Retirement Income Option (i.e. RRIF) by the end of the year in which you turn 71 and begin withdrawing the annual minimum amount as required by Canada Revenue Agency (CRA). This is based on your age or that of your spouse, and the amount in the RRIF.

Do I have to pay income tax?

Funds within a RRIF continue to be income tax sheltered, it’s only the withdrawals on which you will pay income tax. Withholding tax, which is a prepayment of your annual income tax liability, may be deducted from your RRIF payment. If you receive only the required minimum amount for a year, no withholding tax is deducted. If you receive more than the annual minimum amount for a year, the amount in excess of the annual minimum amount is subject to withholding tax, and will be deducted from your payment. At the end of the year, you will receive a T4RIF slip showing the full amount of RRIF payments received, the amount in excess of your annual minimum amount for that year, and the withholding tax deducted on the excess.

Pension Income Credit

If you are 65 or over in a year, income from a Registered Retirement Income Fund or Life Income Fund qualifies for a Pension Income Credit. For further information, talk to a Financial Planner.

Can I make it simpler?

Retirement is meant to be enjoyed without a lot of complicated paperwork. Since each RRIF that you have must have a separate set of paperwork and calculations, why not consolidate them at Access CU? We will look after the paperwork for you and you can rest assured that your money will continue to work for you, long after you’ve stopped working for your money.

*Mutual funds are offered through Credential Asset Management Inc. and mutual funds and other securities are offered through Credential Securities Inc. Unless otherwise stated, cash balances, mutual funds and other securities are not covered by Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund. ®Credential and Credential Securities are registered marks owned by Credential Financial Inc. and are used under license.

Registered Terms (Rates effective 2017-01-30) Rates
13 month Special 2.25%
50 month Special 2.35%
Variable 1.25%
7 to 11 Months 1.75%
12 to 19 Months 1.75%
20 to 29 Months 1.85%
30 to 39 Months 1.95%
40 to 54 Months 2.10%
55 to 60 Months 2.25%
 

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