RRIF Questions and Answers
When can I start to receive income from my RRIF? Expand/Collapse
There is no minimum age for converting an RRSP to a RRIF, so you can convert as soon as you need retirement income. But you do have to convert your RRSP investments into some form of retirement income before the end of the calendar year in which you turn 71. You can make a contribution to your RRSP for that year as long as you contribute by December 31.
Is retirement income taxable? Expand/Collapse
There are no tax consequences when you transfer your funds from an RRSP to a RRIF. The payments you receive from your RRIF are taxable at the same rates as RRSP withdrawals, but withholding tax is not automatically applied to minimum RRIF payments. Since your RRIF income is spread over your retirement years, so are the taxes. If you are over age 65, income received from your RRIF and other pensions qualifies for the Pension Income Credit, which can lead to tax savings.
How do I choose my payment level? Expand/Collapse
You must take some taxable payments from the RRIF each year, except the year that you first open your RRIF. You can choose any payment level, as long as the total each year is at least equal to the mandatory minimum amount.
Can I choose to base my RRIF payments on my spouse's birthdate? Expand/Collapse
Yes, you can choose to base your RRIF payments on your birthdate or your spouse's/common-law partner's birthdate.
- If your spouse is younger, especially if younger than 71, your minimum payments will be much lower
- If you select the age of the older spouse, your minimum payment will be higher without triggering a withholding tax at source
- If both RRIFs are based on the same birth date, when one spouse passes away the survivor can combine two or more RRIFs into one, rather than having to continue with separate RRIFs
If you didn't make this choice when you applied for your RRIF, or if you marry or enter into a common-law partnership later, you can transfer your RRIF to a new RRIF based on your spouse's age.
2015 CRA RRIF Minimum Changes FAQ
The federal government has made changes to the minimum amount required as a withdrawal from a RRIF plan effective January 1, 2015. This change is reflective of more recent long-term historical rates of return and expected inflation.
If you haven’t received your RRIF annual minimum payment for 2015 or if you have a received a partial payment of your annual minimum payment you may request to have your RRIF payment amended to the new 2015 minimum amount.
If you have received your payment based on the old minimum amount, you are eligible for a re-contribution of the difference between the old minimum amount and the new reduced minimum amount if you choose.
If you would like to request a change to your annual minimum payment, please visit your local branch or call us at 1.877.560.0100.
What changes have been made to the RRIF minimums? Expand/Collapse
The 2015 Federal Budget released measures to reduce the withdrawal factor for Registered Retirement Income Funds (RRIFs) for annuitants between the ages of 71 and 94.
When are these changes effective? Expand/Collapse
These changes are effective retro-actively to January 1, 2015.
Will Alterna automatically reduce my 2015 minimum payment based on changes imposed by the 2015 Federal Budget? Expand/Collapse
No. For 2015, Alterna will pay out RRIF minimums based on the ‘old’ withdrawal factors. If you would like to have your payment(s) modified to reflect the ‘new’ minimum withdrawal factors, you must provide specific instructions to do so.
I have a RRIF that was issued prior to 1993 (i.e. Qualified RRIF). Do these changes apply? Expand/Collapse
Yes, these changes apply to all types of RRIFs.
What happens if I’ve already taken my minimum payment, or I do not want to modify my periodic payments for 2015? Expand/Collapse
You may be eligible for a re-contribution to your RRIF if you have withdrawn more than the new minimum for your age in 2015 as a result of this reduction. You will be permitted to re-contribute the excess, representing the calculated difference between the existing minimum withdrawal amount, and the new reduced minimum withdrawal amount. The re-contribution will be deductible for the 2015 tax year.
How do I request a change to my payment amount? Expand/Collapse
If you would like to request a change to your annual minimum payment amount you can:
- Visit your local branch
- Call the Alterna Contact Centre at 1.877.560.0100
How do I determine my eligibility for a re-contribution to my RRIF? Expand/Collapse
If you have already received your RRIF annual minimum payment for 2015, or choose not to adjust your remaining payments to reflect the new minimum, you may be eligible for re-contribution. Speak to one of our representatives more information to help you determine your eligibility for a RRIF re-contribution.
How long do I have to re-contribute my eligible amount? Expand/Collapse
What happens if I choose not to re-contribute the eligible amount? Expand/Collapse
If you choose not to re-contribute the eligible amount, it will be reported in Box 16 of the T4RRIF slip as a taxable amount. This amount will not be subject to excess withholding taxes for the 2015 taxation year. Only amounts withdrawn in excess of the “old” minimum amount will be subject to excess withholding taxes for 2015 only.
Can I make a partial re-contribution? Expand/Collapse
Yes. If you are eligible for a re-contribution, you may re-contribute any amount up to, but not exceeding the difference between the old minimum and the new minimum.
I have more than one RRIF held by different institutions. If I choose to direct all of my eligible re-contributions to my RRIF held at Alterna, will Alterna provide me with a confirmation that I have not exceeded my total eligible re-contribution amount? Expand/Collapse
No, it is your responsibility to ensure that you are not over re-contributing to your RRIF(s). Alterna cannot track what other RRIFs you may have with other financial institutions. Alterna will only provide you with confirmation of the eligible re-contribution amount for any RRIFs held at Alterna.
I am currently taking a specified payment amount over the old RRIF minimum, what amount am I eligible to re-contribute? Expand/Collapse
You may only be eligible to re-contribute the difference between the old minimum and the new minimum for the 2015 tax year.
What will I receive when I make an eligible re-contribution? Expand/Collapse
You will receive a contribution receipt that will indicate that it is a 2015 re-contribution to your RRIF as well as an Eligible Withdrawal Amount letter.
When will my re-contribution receipt and eligible withdrawal amount letter get mailed to me? Expand/Collapse
You can expect to receive your re-contribution receipt and eligible withdrawal amount letter in March 2016. Exact mailing dates have not been released.