RRSPs and RRIFs often appear together because money can move directly from one to the other, but they are not interchangeable accounts. A Registered Retirement Savings Plan (RRSP) is primarily designed to accumulate retirement savings. A Registered Retirement Income Fund (RRIF) is designed to distribute registered savings as retirement income.
The practical difference is what the account allows you to do with your money. An RRSP can accept eligible contributions and does not normally force you to make annual withdrawals. A RRIF does not accept ordinary new contributions, and after its first calendar year, it requires a minimum amount to be withdrawn annually. Those rules make the RRSP the accumulation side of the system and the RRIF the withdrawal side.
You Contribute to an RRSP, but Fund a RRIF by Transfer
An RRSP allows you to make contributions while you have available RRSP contribution room. Eligible contributions can also generate an RRSP tax deduction, although the amount you contribute and the amount you deduct do not necessarily have to be identical in a particular year. This contribution mechanism is one of the defining features of an RRSP because it lets you add retirement savings over time while remaining within the registered-plan rules.
A RRIF is funded differently. You cannot make ordinary contributions to it as though it were another RRSP. Instead, eligible registered property is transferred into the fund, commonly from an RRSP. A properly completed direct RRSP-to-RRIF transfer does not require the financial institution to withhold tax from the amount transferred. Receiving the RRSP money personally in cash or by cheque and then trying to deposit it into a RRIF is not treated as the same type of direct transfer, which is why we would have the financial institution handle the RRSP-to-RRIF conversion.
RRIFs Introduce Mandatory Annual Withdrawals
An RRSP allows withdrawals, but it does not generally require you to withdraw a prescribed amount every year. Money can therefore remain inside the plan until you decide to take it out or the RRSP reaches its maturity deadline. Ordinary withdrawals are generally taxable and subject to withholding tax, with separate rules applying to specific programs and circumstances. Our RRSP withdrawal rules cover those situations separately rather than expanding them here.
A RRIF changes that arrangement by introducing a required annual payment. No minimum has to be paid in the calendar year the fund is established. Starting the following year, the carrier calculates a minimum based on the RRIF’s value and the applicable prescribed factor, and you cannot withdraw less than that amount. You can take more whenever you want. When establishing the fund, you may also elect to have the minimum calculated using your spouse’s or common-law partner’s age instead of your own, which can affect the required payment. The specific calculations belong in our guide to RRIF minimum withdrawal rules and rates by age.
RRSPs Have an Age Deadline That RRIFs Do Not
An RRSP cannot remain open indefinitely. Under the 2026 rules, December 31 of the year you turn 71 is the last day you can contribute to your own RRSP, and the plan must mature by the end of that year. You then have three basic choices for the RRSP assets: withdraw them, transfer them to a RRIF, or use them to purchase an eligible annuity. A RRIF is therefore a common destination for an RRSP, but Canadian tax rules do not require everyone to choose one.
There is no corresponding rule requiring you to wait until 71 before opening a RRIF. Someone can establish one earlier and even hold an RRSP and RRIF simultaneously while still eligible to maintain the RRSP. That flexibility is useful because the decision to start drawing registered retirement income does not have to occur at the RRSP maturity deadline.
Both Can Hold Investments, but the Cash Flow Is Different
Converting an RRSP to a RRIF does not inherently mean selling the investments and turning the portfolio into cash. Eligible property can move through a registered transfer, allowing investments to remain within a tax-deferred registered environment. Consequently, a RRIF can continue holding investments whose values and earnings change after withdrawals have begun. A person who wants direct investment control can also use a self-directed RRIF.
The cash-flow direction is what changes. Money can enter an RRSP through eligible contributions, whereas a RRIF is structured around payments leaving the account. We think this is more useful than viewing conversion as the moment investing ends. The investments may continue, but the account now has to support withdrawals as well, so enough liquidity eventually has to be available to make the required payments.
RRSP and RRIF Withdrawals Are Taxed Differently at Source
Money withdrawn from either account generally becomes taxable income, but the withholding mechanics are not identical. For an ordinary RRSP withdrawal by a Canadian resident outside Quebec, the 2026 federal withholding rates are 10% on amounts up to $5,000, 20% on amounts over $5,000 through $15,000, and 30% on amounts above $15,000. Quebec uses different federal rates and also has provincial withholding. These deductions are payments toward the tax ultimately calculated on the person’s income tax return, not a separate final tax rate on RRSP withdrawals.
For a RRIF, the required annual minimum normally has no tax withheld at source. When you request an amount above that minimum, withholding generally applies to the excess portion using the applicable lump-sum withholding rules. This can make a RRIF payment look less heavily taxed when received even though the minimum remains taxable income and may still produce tax owing later. Our guides to RRIF taxation and RRIF withholding tax rates deal with that issue in detail.
Other Questions About RRIFs and RRSPs
Can you convert only part of an RRSP to a RRIF?
A partial transfer can be made before the RRSP reaches its maturity deadline, allowing some eligible property to move to a RRIF while the remaining property stays in the RRSP. Once the maturity deadline arrives, however, the RRSP itself cannot simply continue unchanged into subsequent years.
Can you move money from a RRIF back to an RRSP?
Certain eligible RRIF amounts can be transferred to an RRSP while you are still permitted to have the receiving RRSP. However, the required RRIF minimum for the year generally has to be paid rather than included in that tax-deferred transfer. Age therefore becomes important when considering whether moving eligible excess RRIF property back into an RRSP is available.
Do RRSP and RRIF withdrawals use the same tax slip?
The accounts use different information slips. RRSP income is generally reported on a T4RSP, while RRIF income is generally reported on a T4RIF. The slips identify the amounts needed when preparing the corresponding income tax return.
Can you contribute to a spouse’s RRSP after converting your own RRSP to a RRIF?
Having your own RRIF does not by itself prevent a contribution to a spouse’s or common-law partner’s RRSP. Under the 2026 rules, someone older than 71 can still contribute to the spouse’s or partner’s RRSP until the end of the year that spouse or partner turns 71, provided the contributor has available RRSP deduction room.
