RIF Payments
By December 31st of your 71st birthday year, Canadian law requires that you convert your RSPs to a RIF – an investment plan that establishes a retirement income stream.
- Annual minimum payment is based on your age on January 1st, and is calculated as a percentage of your RIF value at the beginning of each year
- If you have a younger spouse, you can use his or her age to determine the annual minimum payment
- If your spouse is younger than you, using his or her age to determine the annual minimum payments results in lower payments
- This is beneficial if you do not need all of your RIF income right now, since lower payments leave more money invested in your RIF, resulting in the potential for greater growth and inflation protection
| Age As Of January 1st | RIFs Purchased Before 1993 | RIFs Purchased After 1993 |
|---|---|---|
| 65 | 4.00% | 4.00% |
| 66 | 4.17% | 4.17% |
| 67 | 4.35% | 4.35% |
| 68 | 4.55% | 4.55% |
| 69 | 4.76% | 4.76% |
| 70 | 5.00 | 5.00 |
| 71 | 5.26 | 7.38 |
| 72 | 5.56 | 7.48 |
| 73 | 5.88 | 7.59 |
| 74 | 6.25 | 7.71 |
| 75 | 6.67 | 7.85 |
| 76 | 7.14 | 7.99 |
| 77 | 7.69 | 8.15 |
| 78 | 8.33 | 8.33 |
| 79 | 8.53 | 8.53 |
| 80 | 8.75 | 8.75 |
| 81 | 8.99 | 8.99 |
| 82 | 9.27 | 9.27 |
| 83 | 9.58 | 9.58 |
| 84 | 9.93 | 9.93 |
| 85 | 10.33 | 10.33 |
| 86 | 10.79 | 10.79 |
| 87 | 11.33 | 11.33 |
| 88 | 11.96 | 11.96 |
| 89 | 12.71 | 12.71 |
| 90 | 13.62 | 13.62 |
| 91 | 14.73 | 14.73 |
| 92 | 16.12 | 16.12 |
| 93 | 17.92 | 17.92 |
| 94+ | 20.00 | 20.00 |
For annuitants age 64 and under, the annual minimum payment is calculated as follows:
RIF value on January 1st of the current year
90 - age of
annuitant/spouse* on January 1st
*Age used depends on the date of birth being used to calculate the minimum.
How Payments Are Taxed
- Withdrawals from a RIF are considered taxable income in the year withdrawn
- Taxation rates vary by province
- Withholding tax is applied, by federal law, to any withdrawals from a registered plan
- The amount withheld depends on the amount of the withdrawal and the province in which you live
- Withholding tax is not applied if you only withdraw the minimum amount in each province
If you withdraw amounts above the minimum, the following withholding taxes will apply.
Applicable To Residents of All Provinces, Except Quebec.
| Amount Withdrawn Above The Minimum Amount | Withholding Tax In All Provinces, Except Quebec* |
|---|---|
| Up to $5,000 | 10% |
| $5,001 to $15,000 | 20% |
| More than $15,000 | 30% |
*The federal withholding rates are technically 5%, 10% and 15%. These rates have been grossed-up to 10%, 20% and 30% by a parallel provincial tax.
Applicable To Residents Of Quebec.
| Amount Withdrawn Above The Minimum Amount | Federal Withholding Tax ** | Provincial Withholding Tax |
|---|---|---|
| Up to $5,000 | 5% | 16% |
| $5,001 to $15,000 | 10% | 16% |
| More than $15,000 | 15% | 16% |
**In Quebec, in addition to the base 5%, 10% and 15%, there is provincial withholding of 16%. This results in combined rates of 21%, 26% and 31% instead of the 10%, 20% and 30% withholding tax applicable in other provinces for withdrawals above the minimum amount.
Effective: January 1, 2005.
