What is RRIF ?
A retirement fund similar to an annuity contract that pays out income to a beneficiary or a number of beneficiaries. To fund their retirement, RRSP holders often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the beneficiary’s normal income and are taxed as such by the Canadian Revenue Agency in the year that the beneficiary receives payouts.
You should consider a RRIF if:
- You want to begin taking an income from your retirement savings plan.
- You want the flexibility to be able to take lump-sum withdrawals if you need extra cash
- You want to make sure your spouse can inherit your retirement savings tax free