1. RRSPs: Introduction
  2. RRSPs: The Benefits
  3. RRSPs: Eligibility
  4. RRSPs: Contributing - Part 1
  5. RRSPs: Contributing - Part 2
  6. RRSPs: Investment Eligibility
  7. RRSPs: Growth
  8. RRSPs: Withdrawals
  9. RRSPs: RRIFs
  10. RRSPs: Registered Plan Strategies
  11. RRSPs: Conclusion

Once you've retired, getting the money from your RRSP is easy. All you have to do is go to the financial institution that is holding your RRSP account and say that you have retired. Then it's time to kick back and relax. Your RRSP will be rolled over to a Registered Retirement Income Fund (RRIF) account. An RRIF is the opposite of an RRSP. Instead of you having to pay into it, an RRIF actually pays you!

However, u

sing an RRIF account does require a morbid calculation: you have to guess how long you're going to live so that the money you've saved in your RRSP will not be gone before you are. Here is one guideline that can be used to work out approximately how much your annual RRIF withdrawal amounts should be:


RRIF Withdrawal Amounts = (Book Value of RRIF at Beginning of Calendar Year)
(1- (90 - plan holder or spouse\'s age))

Keep in mind that this formula is meant to be very general; it does not take into account unforeseen expenses. The point of the formula is to come up with an amount of money that can be withdrawn on an annual basis up until the retiree reaches the age of 90. In this example, we assume that the average age at which someone dies is 90. Again, we've made a very rough estimation. The formula yields a negative number because it represents the money that is withdrawn from the total investment. An RRIF payment is an annuity due; therefore, money that is taken out of an RRIF is spent from the beginning of the period to the end, as opposed to investments, which are made at the end of periods, after money is earned.


Money withdrawn from your RRSP through RRIF account payouts is taxed at your marginal tax rate (for more on this, see How does the marginal tax rate system work?). If you have $300,000 saved for your retirement and you're 65 years old, your RRIF will pay you about $1,000 per month. If this $1,000 is your only source of income, you will be taxed at a marginal rate of 15%, leaving you with about $850 every month. You may also receive a monthly Canada Pension Plan check if you are eligible.

RRSPs: Registered Plan Strategies

Related Articles
  1. Financial Advisor

    Maxing Out Your RRSP (Canadian)

    Increasing your savings will provide tax benefits - and peace of mind.
  2. Retirement

    Registered Retirement Savings Plans (RRSP)

    Learn how the Canadian government makes saving for your post-work years easy. We take you from your first contribution to your first withdrawal.
  3. Retirement

    Making Your Own Comprehensive Retirement Plan

    Your retirement plan should include much more than how much you will save and how much you need. It must take into account your complete financial picture.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center