Cameron Passmore CIM, FMA, FCSI

Portfolio Manager

Benjamin Felix MBA, CFA, CFP

Associate Portfolio Manager
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  • 1.800.230.5544
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Changes to the RRIF Minimum Payment Schedule

June 5, 2015 - 0 comments

RRSPs and RRIFs are major vehicles for Canadian retirement and the recent federal budget has improved their structure for retirees. An owner of an RRSP can transfer the account into a RRIF once they have stopped contributing and wish to withdraw the funds for retirement. They can do so at any point after they turn 55, but they must do so in the year that they turn 71. In the year after the RRSP has been transferred into a RRIF, the owner must start to make their annual withdrawals. There is a schedule that dictates a minimum amount to be withdrawn each year based on the age of the owner or their spouse. These mandatory withdrawals are considered income and are fully taxed at the owner’s marginal rate, which is a concern for those with sizeable retirement savings in registered accounts. 

The 2015 federal budget, yet to be passed at the time of this publication, has provided some relief to Canadian retirees by dampening the impact of the minimum payments each year. Under the previous schedule, retirees were forced to withdraw 7.38% of their RRIF at age 71. This amount increased each year up to 20% at age 94. The new changes start the mandatory payment amount at 5.28% of their RRIF at age 71, which is about 28% less than the previous schedule. The schedule continues to grow the minimum incrementally to 20% until age 95, up from 94.  Now retirees can keep more of their savings in their RRIF to grow tax deferred and decrease their taxable income when compared to previous years.

You can find the new schedule for the annual minimum payments below:

PWL Capital - Changes to the RRIF Minimum Payment Schedule

*If you have already received your RRIF payment in 2015, you will be able to make a RRIF contribution for the difference between the two schedules.

Download the PDF version: Annual Minimum RRIF Payment Schedule

By: Max Lane with 0 comments.
Filed under: 2015 Budget, Retirement, RRIF, Tax
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