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RRIFs
A RRIF is a financial product created with “non locked-in” RRSP funds designated to provide regular income to you. This plan is the most popular form of retirement income. It provides greater flexibility than other more restricted choices, such as pension plans.
The interest in a RRIF accumulates tax free until funds are paid out. The RRIF provides you with payment flexibility, subject to an annual minimum payment which qualifies for the pension income tax credit. In the event of death, the RRIF payments may be transferred to your spouse. A Registered Retirement Income Fund might be worth considering if you need to convert retirement savings to income, or if you wish to access your funds at any time. Only funds from a RRSP may be transferred to a RRIF.
Any individual, regardless of age, wishing an income stream to be generated by his/her RRSP(s) can have a RRIF. All individuals reaching 71 years of age by December 31st in any given year and having a registered retirement savings plan may also hold a RRIF. Payment flexibility, estate preservation and investment control add to the number of competitive advantages provided in a RRIF.