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Retirement Planning > RRSP's - Maturity Options
Retirement Planning
RRSP Maturity Options
You can convert all or a portion of your RRSP assets. This conversion can occur at any time, but you must convert all RRSP assets by December 31st of the year in which you turn age 69. You must convert all rrsp assets into RIF as per RIF guideline. We will be pleased to discuss these guidelines with you and how to best meet your financial needs.
Your decision relates to whether or not you want income now or later, or if you want to maximize your estate for your heirs. Some of the criteria to consider include:
- personal and family income needs
- estate objectives
- required income flexibility versus income guarantee
- desire to minimize income tax
- need to protect against inflation.
The tax implications of your decision will vary depending upon the option that you choose. A RRIF will continue to provide a degree of tax deferral since income will be received over a number of years. Lump sum payments of cash will attract the most adverse tax consequences. Lump sum payments are generally inappropriate except when the RRSP is relatively small.
Registered Retirement Income Fund (RRIF)
A Registered Retirement Income Fund (RRIF) is basically an extension of an RRSP except that it is intended to provide an on-going flow of income. Choosing this option will allow you all the same flexibility provided by the RRSP such as allowable investment types and access to funds.
Unlike an RRSP, a RRIF does require the receipt of at least a minimum annual payment. The RRIF option provides the maximum amount of flexibility of the available maturity options, allowing you control over the management of your assets, flexibility of annual income and potential tax minimization.
