The Right Time to Convert Your RRSP to a RRIF

Should I wait until I'm 71 to convert my RRSP to a RRIF? Every situation is unique and the answer to this question is dependent on many financial factors such as whether you currently receive a pension/employment income or whether your income is likely to change in the future. It’s also always important to have your advisor conduct a scenario analysis of your projected income and tax situation as it relates to your retirement years as well as determine your eligibility for government benefits like Old Age Security (OAS). Generally, if you’re retired and don’t have other pension income, it may make a lot of sense to convert your RRSP to a RRIF early to receive the pension tax credit ($2,000/year after age 65). If your spouse is younger, you may also base your withdrawals on your spouse’s age to lower your minimum withdrawal rate, not to mention the ability to notionally split 50% of your RRIF withdrawals with your spouse - a key tax planning strategy for retirees. This question requires specific analysis of your situation so please contact me to learn more. 

Tanya Wilson

Tanya Wilson, BBA, CFP, FCSI, CIM
Portfolio Manager & Certified Financial Advisor