What Happens To My RRSP When I Turn 71?

Age 71 RRSP Deadline Options

By December 31st of the year you turn 71, Canadian law requires you to convert your RRSP.
Here is how to decide between a Life Annuity, a RRIF or both.

Age 71 RRSP Decision Tree

Follow the paths below to see if a Life Annuity, a RRIF or a Combination of both fits your goals:

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• Zero market risk
• Optional 10-20 yr guarantee] D --> D1[• Flexible withdrawals
• Exposed to market risk
• Mandatory yearly minimums] E --> E1[• Annuitize 30-50% for basic bills
• Keep remainder in RRIF for growth] classDef main fill:#337ab7,stroke:#2e6da4,color:#fff,stroke-width:2px; classDef decisionBox fill:#bfe5ff,stroke:#003366,color:#003366,stroke-width:2px; classDef nodeBox fill:#f8f8f8,stroke:#cccccc,color:#222222,stroke-width:1px; class A,C,D,E main; class B decisionBox; class C1,D1,E1 nodeBox;
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1. Life Annuity

Converts your lump-sum RRSP into a guaranteed paycheck for life. Ideal if you want zero market risk and predictable income to cover baseline expenses.

2. RRIF Account

Transfers your funds tax-free into a RRIF. You retain full investment control, but you must take mandatory annual minimum withdrawals regardless of market drops.

3. Hybrid Strategy

Uses 30% to 50% of your RRSP to buy an annuity for fixed monthly bills, leaving the remaining funds in a RRIF for portfolio growth and emergency cash.

Where Age 71 Fits in Your Canadian Retirement Timeline

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Frequently Asked Questions: Converting Your RRSP at Age 71

By December 31st of the year you turn 71, Canadian tax law requires you to close your RRSP. You must choose one of three options: convert it tax-free into a RRIF, purchase a registered Life Annuity for guaranteed lifetime income, or withdraw the entire lump sum as taxable income.
A Life Annuity is better if you want a guaranteed monthly income check for life with zero market risk. A RRIF is better if you want investment flexibility and liquid control of your funds, though your portfolio remains exposed to market downturns and mandatory annual minimum withdrawals.
Yes. A hybrid strategy allows you to use a portion (typically 30% to 50%) of your RRSP to buy a Life Annuity to cover essential fixed living expenses (housing, utilities, groceries), while transferring the remainder into a RRIF for portfolio growth and emergency withdrawals.
The strict deadline is December 31st of the calendar year in which you turn 71 years old. Failing to convert your RRSP by this date could result in the entire account being deregistered and taxed as a single lump-sum income payment.
Mandatory withdrawals start the calendar year after you open a RRIF. If you convert your RRSP at age 71, your first mandatory payout takes place at age 72 at a CRA minimum rate of 5.40% of your account's January 1st market value. (The 5.28% rate only applies to accounts already active on January 1st of your 71st year).
Yes. If your spouse or common-law partner is younger than you, you can elect to base your annual mandatory minimum withdrawal rate on their age instead of yours. This lowers your mandatory withdrawal percentage, reducing immediate taxable income and allowing more money to remain tax-deferred in your account. This election must be made when setting up the RRIF before taking your first payment.
You can no longer contribute to your own RRSP after December 31st of the year you turn 71. However, if you are still working and have unused RRSP contribution room—and your spouse is under age 71—you can continue contributing to a Spousal RRSP until December 31st of the year they turn 71 to lower your personal taxable income.
Yes. Because all RRIF withdrawals are counted as taxable income in the year they are taken, large withdrawals could push your total net income above the CRA Old Age Security (OAS) recovery threshold. Income above the threshold triggers a 15% OAS pension recovery tax (clawback).

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Important Deadline Tip: Don't Wait Until December 31st

While December 31st is the official government tax deadline to wind up your RRSP, financial institutions and pension funds need time to process paperwork. It is strongly recommended to submit your conversion forms by November 1st of the year you turn 71. This guarantees your payments start smoothly on time without administrative delays.

Legal Disclaimer

General Information: The contents on this page including text, tables, CRA rates and visual charts is for general educational and informational purposes only. It does not constitute personal financial, investment, legal or tax advice.

No Liability & Changing Rules: Canadian tax regulations (CRA), provincial rules (e.g., Revenu Québec) and annuity rates change frequently. Rates, projections and tax implications shown are third-party estimates subject to change without notice. Neither this website nor its operators accept liability for any financial decisions or actions taken based on this material.

Consult a Licensed Advisor: RRIF conversions, annuity purchases carry permanent tax and income consequences. Before purchasing any financial product or finalizing plan documents, you must consult with a licensed Canadian financial advisor, insurance specialist or accountant to review your specific situation.

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