Just turned 71? Time running out to convert RRSP to RRIF

Your investments needn't change, as long as you meet the annual withdrawal requirement.

Matthew Elder 4 December, 2014 | 6:00PM

Much attention is given to the March 1 deadline for making a contribution to a registered retirement savings plan. But too often overlooked is the timeline for closing an RRSP and transferring the money held within it to a registered retirement income fund (RRIF) or registered annuity.

An RRSP must be collapsed no later than the end of the year in which the planholder turns age 71. A plan that is left intact into the following year will automatically be deregistered, and tax paid must be in full that year on the value of the entire RRSP. By contrast, income paid out by a RRIF or annuity is taxed only in the year you receive it.

Acting just short of a deadline rarely is a good idea when it comes to properly assessing circumstances and making sensible decisions. But unless you are contemplating using your RRSP savings to buy a registered annuity (and receive guaranteed income from it for life or until a specified age), you don't have to make any major decisions because your investments can remain the same. Only the account type needs to be changed, from RRSP to RRIF.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

About Author

Matthew Elder

Matthew Elder