Once a Registered Retirement Income Fund (RRIF) enters its minimum-withdrawal phase, a portion of the account must be paid out every year. The amount is not a fixed dollar figure. It is calculated from the RRIF’s value at the beginning of the year and a prescribed factor based on your age, or your spouse’s or common-law partner’s age if you made that election when the fund was established.
No minimum withdrawal is required during the calendar year in which you establish the RRIF. The requirement begins the following year, and you may withdraw more than the calculated minimum but not less. The percentage generally rises with age, meaning a larger portion of the account becomes subject to mandatory withdrawal over time.
How the RRIF Minimum Withdrawal Is Calculated
For a standard RRIF, your financial institution determines the annual minimum by multiplying the fair market value of the RRIF at the beginning of the year by the applicable prescribed factor. This is the formula:
RRIF value at the beginning of the year × prescribed factor = annual minimum withdrawal
For example, suppose a 72-year-old has a RRIF worth $300,000 at the beginning of the year. The prescribed factor at 72 is 5.40%, producing a minimum withdrawal of $16,200 for that year. The calculation is based on the opening value rather than continually recalculating the requirement as investment prices or the account balance change during the year.
The financial institution is responsible for calculating and paying the required amount. Payments can be arranged according to the options offered by the provider, such as monthly, quarterly or annual distributions, provided the required total is ultimately paid. The RRIF minimum calculation rules also specify that expenses such as mutual-fund redemption fees are not counted as part of the minimum payment.
RRIF Minimum Withdrawal Rates by Age
For most RRIFs Canadians establish today, the prescribed factor for someone under 71 is calculated as 1 ÷ (90 − age). From age 71 onward, the prescribed factors are set by the Income Tax Regulations.
The following table shows the standard RRIF minimum withdrawal rates. The age used is your age at the beginning of the year, unless you elected to use your spouse’s or common-law partner’s age when establishing the RRIF.
| Age | Minimum rate |
|---|---|
| Under 55 | 1 ÷ (90 − age) |
| 55 | 2.86% |
| 56 | 2.94% |
| 57 | 3.03% |
| 58 | 3.13% |
| 59 | 3.23% |
| 60 | 3.33% |
| 61 | 3.45% |
| 62 | 3.57% |
| 63 | 3.70% |
| 64 | 3.85% |
| 65 | 4.00% |
| 66 | 4.17% |
| 67 | 4.35% |
| 68 | 4.55% |
| 69 | 4.76% |
| 70 | 5.00% |
| 71 | 5.28% |
| 72 | 5.40% |
| 73 | 5.53% |
| 74 | 5.67% |
| 75 | 5.82% |
| 76 | 5.98% |
| 77 | 6.17% |
| 78 | 6.36% |
| 79 | 6.58% |
| 80 | 6.82% |
| 81 | 7.08% |
| 82 | 7.38% |
| 83 | 7.71% |
| 84 | 8.08% |
| 85 | 8.51% |
| 86 | 8.99% |
| 87 | 9.55% |
| 88 | 10.21% |
| 89 | 10.99% |
| 90 | 11.92% |
| 91 | 13.06% |
| 92 | 14.49% |
| 93 | 16.34% |
| 94 | 18.79% |
| 95 or older | 20.00% |
These are the factors for standard RRIFs rather than the special schedules applicable to certain much older arrangements. A qualifying RRIF established before 1993 may use different prescribed factors in some circumstances, so someone holding one of those legacy funds should use the applicable CRA prescribed-factor chart rather than assuming the standard table applies.
Using Your Spouse’s Age for the Minimum Withdrawal
When you establish a RRIF, you can elect to calculate future minimum withdrawals using the age of your spouse or common-law partner instead of your own. The choice must be made on the original RRIF application and, once made, cannot be changed for that RRIF.
Using a younger spouse’s age results in a lower prescribed factor and therefore a smaller required withdrawal. Suppose you are 75 but elected to use a 65-year-old spouse’s age. The applicable standard factor would be 4.00% rather than the 5.82% associated with age 75. On a $400,000 opening balance, that difference would make the year’s minimum $16,000 instead of $23,280.
The election affects only the required minimum. It does not prevent you from voluntarily withdrawing more. Because the choice remains attached to that RRIF, it is worth deciding which age to use when completing the account-opening paperwork rather than treating the question as an administrative detail.
What Happens If You Withdraw More Than the RRIF Minimum?
The minimum is a floor, not a target or maximum. You can request a larger payment or additional withdrawals during the year, and an ordinary RRIF does not impose a general maximum withdrawal amount. Taking more simply reduces the property remaining in the fund and may have tax consequences beyond those associated with taking only the required amount.
For Canadian residents, the required minimum itself generally does not have income tax withheld at source. Amounts withdrawn above the minimum are generally subject to withholding, although the amount withheld is not necessarily the final tax ultimately payable. The separate mechanics are covered in our guides to RRIF withdrawal taxation and RRIF withholding tax rates.
What If the RRIF Does Not Pay the Required Minimum?
A registered RRIF is structured so that the carrier must make payments totalling at least the minimum amount for each year in which the requirement applies. The RRIF registration rules place that obligation on the carrier, which is why financial institutions calculate the annual requirement and establish payment arrangements with the annuitant.
If you normally take payments manually, we would still check the minimum shown by the institution rather than assume previous withdrawals have satisfied it. The required dollar amount can change from one year to the next because both the applicable age factor and the account’s beginning-of-year value can change.
Questions About RRIF Minimum Withdrawals
What happens if the RRIF is worth less than the calculated minimum?
A minimum payment cannot exceed the value of the property held in the RRIF immediately before the payment. This matters when a fund has been almost completely depleted and no longer contains enough property to make the otherwise calculated amount.
Does each RRIF have its own minimum withdrawal?
If you maintain multiple RRIFs, the minimum is determined for each fund rather than calculating one combined minimum across all of them. Each carrier therefore administers the requirement associated with the RRIF it holds.
Can the RRIF minimum be paid with investments instead of cash?
The minimum can be paid in kind, meaning property can potentially be distributed from the RRIF rather than the payment being made entirely in cash. The transferred property is still treated as a RRIF payment at its applicable value rather than avoiding the withdrawal requirement.
Does a mutual fund redemption fee count toward the RRIF minimum?
Redemption costs charged when units are sold are expenses of the RRIF and do not form part of the minimum amount paid to the annuitant. The actual payment therefore has to satisfy the required minimum without counting those charges toward it
