A RRIF and a life annuity do not have to be an all-or-nothing decision. Some retirees keep part of their retirement savings in a RRIF for flexibility, while using part to create guaranteed income for life.
Quick Answer
A Registered Retirement Income Fund (RRIF) may be the better option, if access to money and leaving an estate to your beneficiaries are your priorities. A life annuity is the better option if you want a guaranteed monthly income for life and protection against outliving your savings. Many Canadian retirees use a combination of both options.
On This Page
Quick Answer
Turning 71?
RRIF vs. Life Annuity
Understanding Your RRIF Withdrawal Requirements
RRIF Minimum Withdrawal Calculator
When a RRIF May Be Worth Keeping
When a Life Annuity May Be Worth Exploring
You May Be Able to Use Both
Should You Annuitize Your RRIF?
Request a Personal Comparison
Turning 71
By the end of the year you turn 71,your registered retirement savings plan (RRSP) generally needs to be converted into an income option, such as a RRIF or registered annuity. Read: Are You Turning 71?
Your Retirement Income Choices
- RRIF
- Life Annuity
- RRIF and Life Annuity Combination
- Cash Withdrawal
RRIF vs. Life Annuity
| Question | RRIF | Life Annuity |
| Do I keep access to my money? | More access to your savings | No cash access after purchase |
| Who manages the investments? | You manage the investments | Insurance company manages them |
| Can I leave money to beneficiaries? | Remaining funds can be passed on | Depends on options chosen |
| Can I outlive the income? | Yes, can run out | Income lasts for life |
Understanding Your RRIF Withdrawal Requirements
A RRIF requires minimum annual withdrawals. Those required withdrawals generally rise as you get older, which can affect how long your savings remain invested.
RRIF Minimum Withdrawal Rates
| Age At start of year | Annual Minimum Withdrawal (%) 1/(90-age) x 100 |
|---|---|
| 60 | 3.33% |
| 61 | 3.45% |
| 62 | 3.57% |
| 63 | 3.70% |
| 64 | 3.85% |
| 65 | 4.00% |
| 66 | 4.17% |
| 67 | 4.35% |
| 68 | 4.55% |
| 69 | 4.76% |
| 70 | 5.00% |
| 71 | 5.28% |
| View All RRIF Withdrawal Rates | |
RRIF Minimum Withdrawal Calculator
Enter your age to instantly see the minimum percentage you must withdrawal from your RRIF this year.
Calculate Your RRIF Minimum Rate
When a RRIF May Be Worth Keeping
- When you need access to money for emergencies or major expenses
- Leaving an estate to beneficiaries is a priority
- Comfortable managing investments
- Other dependable income from pensions, CPP, OAS or other sources
- You want the potential of investment growth
When a Life Annuity May Be Worth Exploring
- You are concerned about outliving your savings
- Market changes make you uneasy
- You want dependable income for basic monthly expenses
- You want income protection for a spouse
- You prefer less responsibility for managing investments
A combined approach lets you use a life annuity to cover everyday expenses while keeping part of your RRIF available for future needs.
You May Be Able to Use Both
A RRIF can provide flexibility and potential investment growth while a life annuity can help cover essential expenses with income you cannot outlive. Compare RRIFs and Life Annuities
- Guaranteed income for essentials
- RRIF flexibility for emergencies
- No market exposure with a life annuity
- Potential growth with remaining RRIF investments
Should You Annuitize Your RRIF?
Answer a few quick questions to see if turning part of your RRIF into a life annuity makes sense. Take the 7-Question RRIF Assessment?
Need a Personal RRIF-to-Annuity Comparison?
An independent financial advisor can help compare a RRIF and a life annuity based on your retirement needs.
Request a Personal Comparison
To review different annuity options use our Annuity Product Finder™. Answer a few quick questions to see which annuity type fits your retirement goals, including joint life, insured annuities, impaired annuities and more.
Disclaimer: This page is for educational purposes and i snot personal financial tax or legal advice.