Photo: Rick Harris from Toronto, Ontario, Canada / Wikimedia Commons, CC BY-SA 2.0, cropped

Turning Your RRSP Into Retirement Income: RRIF Rules, Minimum Withdrawals, and CPP and OAS Timing (2026)

From saving to spending

Building an RRSP takes decades. Spending it well takes a plan too. The main questions are:

1. When does the RRSP have to change, and into what?
2. How much must, and should, you withdraw each year?
3. How do CPP and OAS fit in?
4. How do you keep the tax bill, and the OAS clawback, down?

The age-71 deadline

By December 31 of the year you turn 71, your RRSP must end. You have three options, and can mix them:

A RRIF holds the same investments you had in the RRSP; for a self-directed account, it's usually a simple form and nothing has to be sold. You can't contribute to a RRIF, but you can still contribute to a spousal RRSP until the end of the year your spouse turns 71, if you have room.

RRIF minimum withdrawals

Each year starting the year after you open the RRIF, you must withdraw at least a set percentage of its January 1 value:

Under 71, the minimum is 1 ÷ (90 − your age). Source: CRA prescribed factors.

Example: a $400,000 RRIF at 72 requires at least $21,600 that year.

Two useful points:

• You can base the minimums on a younger spouse's age to withdraw less.
• There's no withholding tax on the minimum. Above it, 10% to 30% is withheld (outside Quebec). Withholding is a prepayment; your real tax depends on total income.

Why some people open a RRIF early

You don't have to wait for 71. From age 65, RRIF withdrawals:

• qualify for the federal pension income amount (a credit on up to $2,000 of eligible pension income), and
• can be split with a spouse: up to 50% can be reported on their return.

Many people turn part of their RRSP into a RRIF at 65 just to withdraw $2,000 a year and use the credit, even if they have other income.

Fitting in CPP and OAS

Government benefits are the foundation of most Canadian retirements, and they're indexed to inflation for life, something your RRSP can't promise.

Because delayed CPP and OAS are bigger, inflation-protected and last as long as you do, a common strategy for people with decent savings is the RRSP bridge:

1. Retire at, say, 63 to 65.
2. Live mostly on RRSP/RRIF withdrawals in your 60s, while your income is otherwise low.
3. Start CPP at 70 (and possibly OAS at 70).

This draws down the taxable RRSP early, at lower tax rates, and leaves you with larger, guaranteed income later, which also protects you if you live to 95. It's not right for everyone: if your health is poor or you need the income now, starting earlier can make sense.

The OAS clawback

OAS is reduced by 15 cents for every dollar of net income above a threshold. In Service Canada's October 2026 figures, it starts at $95,323 of net income, and OAS is fully clawed back by about $155,320 (ages 65–74).

Big mandatory RRIF withdrawals in your 70s can push you over. Ways to stay under:

• Draw down RRSPs earlier, in your 60s.
• Split pension income with a lower-income spouse.
• Use your TFSA, since TFSA withdrawals aren't income.
• Delay OAS if you'll be above the threshold for a few years anyway.

A sensible withdrawal order

There's no single right order, but a common approach:

1. Early retirement (before CPP/OAS): RRSP/RRIF withdrawals to fill lower tax brackets.
2. After CPP/OAS start: RRIF minimums plus non-registered savings.
3. TFSA last, or for big one-off expenses, because it's tax-free and doesn't affect benefits. It's also tax-free for your heirs.

When you die, a RRIF can roll tax-free to a surviving spouse. Otherwise the whole balance is taxed as income on your final return, another reason not to leave a very large RRIF untouched.

How to invest a RRIF

You'll be withdrawing for 20 to 30 years, so a RRIF still needs growth. Common setups:

• A balanced all-in-one ETF (40% to 60% stocks).
• A bucket approach: 1–2 years of withdrawals in cash or a high-interest savings ETF, the next several years in bonds or a GIC or bond ladder, the rest in stocks.

Our guide to investing a self-directed RRSP covers the building blocks.

How much can you safely spend?

A popular rule of thumb is to start by withdrawing about 4% of your savings in the first year and adjusting for inflation after that. RRIF minimums start near that level and rise with age. Our article on how much you need to retire works through the numbers.

The bottom line

By 71 your RRSP must become a RRIF (or an annuity). The RRIF stays invested, but you must withdraw a rising minimum each year. Planning ahead lets you use the pension credit, split income with a spouse, avoid the OAS clawback and, for many people, delay CPP and OAS for bigger lifelong payments. Map it out in your early 60s, not your last week at 71.

This article is educational and not personalized financial or tax advice. Benefit amounts and thresholds are as of October 2026 and change every year.

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