RRIF Withdrawals in Ontario: Rules, Minimums, and Tax Strategy

At some point, the RRSP you've spent decades building has to become a source of income rather than savings. The vehicle for that transition is the Registered Retirement Income Fund (RRIF). Understanding how RRIF withdrawals work — and how to manage them strategically — is one of the more consequential pieces of retirement planning for Ontarians.

Marc Pineault at Pineault Wealth Management in London, Ontario helps clients across southwestern Ontario navigate the RRSP-to-RRIF conversion and build withdrawal strategies that minimize unnecessary tax while supporting their retirement lifestyle. Here's what you need to know.

Converting Your RRSP to a RRIF

You must convert your RRSP to a RRIF (or another qualifying option like an annuity) by December 31 of the year you turn 71. There is no minimum age for conversion — you can convert earlier if your financial plan calls for it — but the mandatory deadline is 71.

Converting before 71 can make sense in certain situations, such as when you need to begin drawing income from your registered savings, or when you want to start managing your RRIF withdrawals in lower-income years before other income sources kick in.

The conversion itself is straightforward: your RRSP assets transfer into the RRIF. Investments you hold inside the RRSP can generally move over "in kind" without being sold. The RRIF continues to hold those investments and grow tax-sheltered — but now, withdrawals are mandatory each year.

RRIF Minimum Withdrawal Rules

Once your RRIF is established, the government requires you to withdraw a minimum amount each year, starting in the year after conversion. The minimum is calculated as a percentage of your RRIF's January 1 balance, and that percentage increases with age.

For example, at age 72, the minimum withdrawal factor is approximately 5.40% of the account balance. By age 80, it's around 6.82%, and it continues to climb. By your late 80s and into your 90s, minimum withdrawals can represent a significant portion of the account annually.

A key planning option: you can elect to use your spouse's age to calculate the minimum, if they are younger. This lowers the required minimum each year, which can help preserve the account and defer taxes if your income from other sources is already sufficient.

Importantly, there is no maximum on RRIF withdrawals. You can withdraw more than the minimum at any time, though those additional withdrawals are fully taxable in the year they're received.

Tax Treatment of RRIF Withdrawals

Every dollar withdrawn from a RRIF is added to your taxable income for that year — the same treatment as RRSP withdrawals. Your financial institution is required to withhold tax on amounts above the minimum withdrawal, though no withholding applies to the minimum amount itself (you're still responsible for the tax when you file).

This matters for several reasons. Large RRIF withdrawals in a single year can push you into a higher marginal tax bracket, trigger OAS clawback (if your income exceeds the threshold — approximately $90,997 in 2025), or affect income-tested benefits and credits.

This is why many financial planners advocate for early and gradual RRIF withdrawals — taking money out in smaller amounts across multiple lower-income years, rather than being forced into large mandatory withdrawals in your late 70s and 80s.

Strategic Considerations: Getting Ahead of the Minimums

One of the most common RRIF planning mistakes is waiting until age 71 to think about it. By then, years of tax-efficient withdrawal opportunity may have been missed.

If you retire at 60 or 65, you may have a window — before CPP, OAS, and pension income all stack up — where your marginal rate is relatively low. Drawing down your RRSP/RRIF during those years, even before it's mandatory, can reduce future minimum withdrawals and spread the tax burden more evenly across retirement.

This strategy becomes even more powerful when combined with spousal income splitting. Canadians aged 65 and older can split up to 50% of eligible pension income (which includes RRIF income) with a spouse. This can meaningfully reduce the household's combined tax burden if one spouse is in a higher bracket.

Converting a portion of RRIF funds to a life annuity is another option that some retirees use to create predictable, guaranteed income — though it involves trade-offs around flexibility and estate planning.

RRIF and Your Estate

Undrawn RRIF funds at death are generally included in the deceased's income in the year of death and taxed at their marginal rate — which can create a significant tax liability. There are important exceptions: RRIF assets can transfer tax-free to a surviving spouse or common-law partner, or in some cases to a financially dependent child or grandchild.

Naming the right beneficiary on your RRIF and understanding the estate implications is an important part of retirement planning — one that's easy to overlook until it's too late to plan around it.

Working with a Financial Planner on RRIF Strategy

RRIF planning isn't a one-time decision. It's an ongoing process of managing withdrawals, coordinating with other income sources, and adapting to changes in tax rules, personal circumstances, and investment markets.

Marc Pineault at Pineault Wealth Management works with pre-retirees and retirees in London, Ontario and across southwestern Ontario to build income strategies that make the RRIF transition as tax-efficient as possible.

Book a consultation with Marc Pineault

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This article is for educational purposes only and does not constitute personalized financial advice. Please consult a qualified financial planner before making any financial decisions.