Registered Retirement Income Fund
Great benefits of opening an RRIF
A Registered Retirement Income Fund (or RRIF) is usually opened when you transfer money from an existing RRSP. It is a type of savings account which has the advantage of providing you with a consistent and regular source of income in your retirement. Here are some good reasons to consider opening a RRIF.
You retain control over how your money is invested. You can choose between investment options such as mutual funds, segregated funds, and GICs for example, depending on your circumstances.
You have the option of stating your spouse as your beneficiary so that they can inherit the funds in your RRIF in the event of your death, without paying any tax. In fact, if you choose to name your spouse as a “successor annuitant” then they are able to take the RRIF over so that they can receive payments from it directly. In addition, your RRIF is not classed as part of your estate and is therefore exempt from exclusion in probate fees.
A final benefit of an RRIF is that the minimum annual withdrawal amounts depend on your age and are lower the younger you are. The age of your spouse can be used to base these minimum annual withdrawals on and, if they are younger than you, this could potentially reduce the amount of tax that you pay on withdrawals.