Changes in the rules for RRIFs have reduced the amount that is required to be withdrawn from a RRIF for individuals over age 70. These changes are effective at the start of the 2015 tax year. For persons under the age of 71 the formula of 1/(90-age) remains unchanged. The age used would be the spouse’s age.
There are also rules, including those that are age related, that are used to determine the minimum amount that has to be withdrawn from a defined contribution pension plan or a Pooled Registered Pension Plan.
If RRIF withdrawals are more than the new minimum amounts, at any time in 2015, the amount representing the excess of the old minimum amount less the new minimum amount can be re-contributed before March 1, 2017. Where such amounts are re-contributed, they can be deducted from income in 2016.
- For those under the age 71 the formula of 1/(90-age) remains unchanged
- This would be the spouse’s age when using that option
- These factors are also used to determine the minimum amount to be withdrawn from a defined contribution pension plan and Pooled Registered Pension Plan
If RRIF withdrawals are more than the new minimum amounts at anytime in 2015, the excess of the old minimum amount less the new minimum amount can be re-contributed before March 1, 2017 and deducted from income in 2016.
FAQ’s on Getting a CPA in Hamilton, ON
What is RRIF and what is its purpose?
RRIF stands for Registered Retirement Income Fund, a retirement vehicle in Canada comparable with an annuity. It provides retirees with a continuous source of income from their savings vehicles. A life income fund (LIF) is an RRIF type offered in the country that’s developed to hold locked-in pension funds.
What is the current minimum for an RRIF withdrawal?
Based on the 2021 RRIF minimum withdrawal rate table, the minimum percentage that Canadian seniors must withdraw from their RRIFs yearly is between 2.86% for those aged 55 and 20% for ages 95 and above. Seniors must make withdrawals from their RRIFs before they turn 72.
How often can I make an RRIF withdrawal?
You can make lump sum withdrawals, or you can do them monthly, quarterly, or semi-annually as long as the total amount equals or goes over the minimum amount. However, if you withdraw more than the minimum, you’d have to pay withholding taxes on the excess.