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RRIF rates for 2023

A retiree aged 71 must withdraw a minimum of 5.28% of the value of their Registered Retirement Income Fund (RRIF) this year.

Registered Retirement Income Fund (RRIF) withdrawal rates for 2023 are unchanged from 2022.

The federal government last changed the rates in 2020 when it offered a one-time pandemic reduction in withdrawals. In 2021, rates returned to normal.

The withdrawal rates that apply to you are based on your age and can be found in tables created by the Department of Finance and available from your bank or investment advisor.

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A RRIF is the opposite of a Registered Retirement Savings Plan (RRSP). In an RRSP, you save money for retirement and get a tax break. Ottawa recoups those taxes by forcing you to convert your RRSP into a RRIF. This must be done by the end of the year in which you turn 71. It can be done earlier, but not later.

Thereafter, you draw down the fund by the applicable amounts which rise as you get older.

Suppose you were 71 on Jan. 1, 2023. Your RRSP was worth $100,000 and converted to a RRIF worth $100,000. You must withdraw 5.28% of its value this year, or $5,280, based on the tables.

Depending on your cash flow needs, you could have taken out all the money on Jan. 1, or all on Dec. 31, or any combination in between. It can be cash or shares, if you own them.

You can also base your withdrawals on the age of a younger spouse. Whether this is the best option is something to discuss with your investment advisor.

For more on the ins and outs of RRIFs read this article.

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Adam Mayers writes about investing and personal finance. He is a contributor to the Globe & Mail’s Globe Advisor and a contributing editor to Gordon Pape's Internet Wealth Builder newsletter. Adam was Business Editor and investment columnist at The Toronto Star and is the author of six books.

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