Registered Retirement Income Fund (RRIF)
Registered Retirement Income Fund – RRIF is a retirement fund similar to an annuity contract that pays out income to a beneficiary. To fund their retirement, RRSP holders often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the beneficiary’s normal income and are taxed as such by the Canada Revenue Agency in the year that the beneficiary receives payouts. The Government of Canada is not the carrier for RRIFs; it merely registers them for tax purposes.
The RRIF plan is designed to provide people with a constant income flow through retirement from the savings in their RRSPs. RRSPs must be rolled over by the time the contributor reaches age 71, but by converting an RRSP into an RRIF, people can keep their investments under a form of tax shelter, while still having the chance to allocate assets according to contributor specifications.