When it comes time to take money out of your RRSP, how do you do it? The Registered Retirement Income Fund (RRIF) was set up to do just that.
The Federal Government designed Registered Retirement Savings Plans (RRSPs) to be used for retirement. Part of that design is a requirement on when they have to be taken out -- you can't defer paying taxes forever. By the end of your 71st year, you will need to move your RRSP into a different vehicle and start to take some money out.
There are two main ways to accomplish this: Registered Retirement Income Funds (RRIFs) and Annuities.
Both Registered Retirement Income Funds (RRIFs) and Annuities are the "back end" of an RRSP. They all involve the withdrawal, over time, of the money invested into your RRSP. Each option has a number of different characteristics concerning investor control, withdrawal period, withdrawal amount, transfer of assets, tax concerns, and more.
What is most important to you?
Complete control and flexibility of your retirement savings? If so, a RRIF may be your best choice for non-locked-in savings.
Or is it more important to have a guaranteed and predictable retirement income during your lifetime and that of your spouse? If so, you may want to consider a life annuity.
If you want some income that is guaranteed AND some that is flexible, a combination of income options could work out well. For instance, you may want to purchase a life annuity to cover your basic expenses including food and shelter and receive the rest of your money in a more flexible way.
We have decades of experience in helping people in Alberta to move their money out of their RRSP by starting a RRIF or Annuity. As Independent Brokers we can shop the market to find the best RRIF and Annuity options available to you.
Contact us today to get started on setting up your retirement income -- simplicity, flexibility and a diversity of investments built to give you choice and mitigate your risk.
Individual RRIFs and Annuities are distributed through Desjardins Financial Security Investments Inc. (DFS Investments)