If you are required to withdraw more money from your RRIF than you need, then take advantage of your tax-free savings account (TFSA).
Everyone should be familiar with the Registered Retirement Savings Plan, but as you get closer to your post-working life, there’s another registered account you need to get to know: the registered retirement income fund. At 72, you’re no longer allowed to invest in an RRSP. In fact, you must – by government regulation – withdraw money from it. Essentially, an RRSP converts into a RRIF, which then becomes the account you remove your money from.
For many retirees, the switch to a RRIF can be confusing. We turned to David Ablett, Director of Tax and Estate Planning at Investors Group, for his take on the benefits of a RRIF and what you need to know to make it work best for you.