Should you buy an annuity with your RRSP dollars?

Guaranteed lifetime income addresses longevity risk.

Gail Bebee 20 October, 2017 | 5:00PM
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Salting away money in a registered retirement savings plan is a popular way for Canadians to save for retirement. The 2016 census found that 35% of all Canadian households contributed to RRSPs. For those in peak earning years, the rate was even higher: nearly half (46.4%) of households with a major income earner aged 35 to 54 contributed. In 2015 alone, RRSP contributions totalled just over $39 billion, according to Statistics Canada.

Eventually, all this RRSP money will need to find a new home. An RRSP must be closed down by the end of the calendar year that the plan holder turns 71. At that point, the holder has three main options.

The most popular option is to convert the RRSP to a registered retirement income fund. RRIFs are flexible. Holdings can usually be transferred directly from an RRSP. The plan holder decides on the investments, and manages the cash flow. The amount withdrawn can be varied as long as the mandatory annual minimum is met.

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About Author

Gail Bebee

Gail Bebee  Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at; her website is

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