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A registered retirement income fund (RRIF) is an arrangement between you and a carrier (an insurance company, a trust company or a bank) that we register. The minimum amount must be paid to you in the year following the year the RRIF is entered into. Earnings in an RRIF are tax-free and amounts paid out of an RRIF are taxable on receipt
You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs
RRIF payouts are considered a part of the beneficiary’s normal income and are taxed as such by the Canadian Revenue Agency in the year that the beneficiary receives payouts. The organization or company that holds the RRIF is known as the carrier of the plan. Carriers can be insurance companies, banks or any kind of licensed financial intermediary. The Government of Canada is not the carrier for RRIFs; it merely registers them for tax purposes.
You don’t have to wait until age 71 to open an RRIF
While there is a minimum you have to take out every year, there is no maximum, so RRIFs give you a lot of flexibility
If your needs increase in the future, these additional savings may come in handy and minimize the amount you have to withdraw from your tax-sheltered RRIF in later years.