Retirement · 7 min read · October 12, 2026 · By

Convert Part of Your RRSP to a RRIF Before 71: How It Works

Most Canadians think of the RRSP to RRIF switch as a single event that happens at 71. It doesn't have to be. You can move part of your RRSP into a RRIF at any age, keep the rest in the RRSP, and run both accounts side by side until the end of the year you turn 71. People do this mainly to create a small, steady stream of pension income from 65, or to draw down savings gradually in the years before CPP and OAS start. This article explains how a partial conversion works, why people consider it, and the rules that catch people out, with a worked example using real numbers.

The basic rules

You can hold an RRSP and a RRIF at the same time. There is no minimum age to open a RRIF. You can transfer all of an RRSP or only part of it, and you can have several RRSPs and several RRIFs. A direct transfer from your RRSP to your own RRIF is not taxed and has no withholding: the money simply changes accounts.

The deadline is December 31 of the year you turn 71. By then, whatever is still in your RRSP must be converted to a RRIF, used to buy an annuity, or withdrawn as taxable income. If you already have a RRIF, the remaining RRSP can be added to it or placed in a new one.

Once money is in a RRIF, a minimum withdrawal applies every year after the year it was set up. The minimum is the RRIF's market value on January 1 multiplied by a factor based on your age on that date. Up to age 70, the factor is 1 ÷ (90 − age): 3.33% at 60, 4.00% at 65, 4.17% at 66. From 71, the CRA's prescribed table applies, starting at 5.28%. The minimum is nil in the calendar year you open the RRIF. The full table is in our post on RRIF minimum withdrawal rates by age.

You can still contribute to your RRSP. Holding a RRIF does not stop RRSP contributions. As long as you have unused contribution room, you can contribute until the end of the year you turn 71. After that, if your spouse or common-law partner is younger, you can still contribute to a spousal RRSP until the end of the year they turn 71. You cannot contribute directly to a RRIF.

RRSP vs RRIF at a glance

	RRSP	RRIF
Withdrawals	Any amount, any time	Any amount, but at least the yearly minimum
Mandatory minimum	None	Every year after the setup year
Withholding tax	On the full withdrawal	None up to the minimum; only on the excess
New contributions	Yes, with room, until the end of the year you turn 71	No
Pension income credit at 65+	Not for lump-sum withdrawals	Yes, RRIF income qualifies
Pension income splitting at 65+	Not for lump-sum withdrawals	Yes, up to 50% with a spouse

Why people do a partial conversion

None of these reasons applies to everyone. They are the considerations that come up most often when people and their advisors look at opening a RRIF before the deadline.

1. Unlocking the pension income credit from 65

RRIF income you receive when you are 65 or older (at the end of the year) counts as eligible pension income. That gives you access to the federal pension income amount, a non-refundable credit on up to $2,000 of eligible pension income. At the lowest federal rate of 14% (as of October 2026), that is worth up to $280 a year in federal tax. Provinces have their own pension credits on top. Lump-sum RRSP withdrawals do not qualify, no matter your age.

If you have no employer pension, this credit goes unused unless you create eligible income. Moving just enough into a RRIF to produce about $2,000 a year is a common way to claim it while leaving the bulk of your savings in the RRSP. Under 65, RRIF income generally does not qualify, except amounts received because of a spouse's or common-law partner's death.

2. Pension income splitting with a spouse

The same eligible pension income can be split with your spouse or common-law partner: up to 50% can be reported on their return instead of yours. The election is made every year, jointly, on Form T1032 (in Quebec, also on Form TP-1012.A for the provincial return). If your spouse is in a lower bracket, this can lower the household's total tax. RRSP lump-sum withdrawals cannot be split this way.

3. Drawing down before CPP and OAS start (the "meltdown")

Some retirees have a few low-income years between leaving work and starting CPP and OAS. Drawing on registered savings in those years, at lower rates, can reduce the taxable income stacked on top of government pensions later. A RRIF makes this smoother: the minimum is paid with no withholding, and only what you take above it is withheld. An RRSP withdrawal is withheld on the full amount.

4. Keeping the RRSP open

Converting only part of your RRSP keeps the account available for any contribution room you still have, for transfers in (such as a retiring allowance or pension commuted value, where eligible), and for flexibility. You can also move money from a RRIF back to your RRSP, as long as it is above that year's minimum and you do it by the end of the year you turn 71. The transfer is reported on your T4RIF and offset by a deduction on line 20800, so there is no net tax; Form T2030 is used for a direct transfer.

A worked example

Marie is 65 on January 1, 2026 and turns 66 later in the year. She has $400,000 in her RRSP and no employer pension. She has not started her CPP or QPP pension. In early 2026 she transfers $50,000 from her RRSP to a new RRIF. The other $350,000 stays in the RRSP.

2026, the setup year. Her RRIF minimum is nil. She asks for a $2,000 payment anyway so she can claim the pension credit this year (she is 65 or older at year-end). Because the minimum is nil, the whole $2,000 counts as an excess amount, so tax is withheld. Outside Quebec that is 10%, or $200; in Quebec it is 5% federal plus 14% provincial, or $380. That withholding is a prepayment of her tax, not an extra cost.

2027, the first full year. On January 1, 2027 Marie is 66. Her factor is 1 ÷ (90 − 66) = 1 ÷ 24 = 4.17%. Suppose growth has brought the RRIF back to about $50,000 by January 1. Her minimum is:

$50,000 × 4.17% = $2,083, paid with no withholding, enough to use the full $2,000 pension income amount.

If the balance stayed at $50,000, here is how her minimum would rise each year. The age is her age on January 1:

Year	Age on Jan 1	Factor	Minimum on $50,000
2027	66	4.17%	$2,083
2028	67	4.35%	$2,174
2029	68	4.55%	$2,273
2030	69	4.76%	$2,381
2031	70	5.00%	$2,500
2032	71	5.28%	$2,640

Marie turns 71 in 2031, so by December 31, 2031 the $350,000 still in her RRSP (plus growth) must be converted, annuitized or withdrawn. Until then, she can keep contributing to it if she has room.

Compare with withdrawing from the RRSP. If Marie instead took $2,000 straight from her RRSP each year, 10% would be withheld every time and none of it would qualify for the pension credit or for splitting. The taxable income is the same; the tax result is not.

A quick sizing rule: the balance that produces exactly $2,000 of minimum is $2,000 ÷ factor. That is $50,000 at 65 (4.00%) and $48,000 at 66 (4.17%).

How withholding differs (and why it is not the final tax)

On an RRSP withdrawal, the financial institution withholds tax on the whole amount, at one rate set by the size of the withdrawal. Outside Quebec, the rates are 10% up to $5,000, 20% over $5,000 up to $15,000, and 30% over $15,000 (as of October 2026). In Quebec, the federal rates are 5%, 10% and 15%, plus 14% for Quebec.

On a RRIF, nothing is withheld on payments up to the minimum. Only the excess above the minimum is withheld, at the same rates.

For example, if you want $20,000 in a year: taken from an RRSP, $6,000 is withheld (30% outside Quebec). Taken from a RRIF whose minimum is $12,500, only the $7,500 excess is withheld at 20%, or $1,500.

Withholding is only a prepayment. Your actual tax is settled when you file, based on your total income. If too little was withheld, you pay the balance in April (and may be asked to pay instalments later). If too much was withheld, you get it back as a refund.

The traps

The minimum is mandatory, every year

Once the setup year has passed, the RRIF must pay at least its minimum every year, even in a year you don't need the money. You cannot pause it. Size the RRIF for the income you actually want.

Once paid, the minimum is taxable

You can move amounts above the minimum back to an RRSP before the end of the year you turn 71, but the minimum itself cannot be sheltered again. It is taxable income for that year.

Withholding on anything extra

Everything above the minimum is withheld, including every dollar in the setup year, when the minimum is nil. Plan cash flow accordingly.

OAS recovery tax

RRIF payments raise your net income. Once you receive OAS, a higher net income can trigger the OAS recovery tax (the "clawback"). A small RRIF rarely matters, but a large early conversion or big extra withdrawals can.

Two accounts, two sets of fees

Some institutions charge annual administration fees per registered account. Check before opening a second one.

Younger spouse? Decide before the first payment

You can base the minimum on a younger spouse's or common-law partner's age, which lowers it. The election must be made before the first RRIF payment and can't be changed afterwards. See how much it changes with the RRIF spouse-age calculator.

Spousal RRIFs and attribution

If the RRIF came from a spousal RRSP, withdrawals above the minimum can be taxed in the contributing spouse's hands if they contributed to any spousal RRSP in that year or the two years before. Minimum amounts are not attributed.

The short version

You can convert part of your RRSP to a RRIF at any age and keep the RRSP open until the end of the year you turn 71.
The RRIF minimum starts the year after setup: 1 ÷ (90 − age) up to 70, then the CRA table.
From 65, RRIF income qualifies for the pension income credit on $2,000 and for pension splitting; lump-sum RRSP withdrawals do not.
Minimum RRIF payments have no withholding; RRSP withdrawals are withheld in full.
The minimum is mandatory and taxable every year, so convert only what you plan to draw.

Run the Numbers on Your RRIF

The RRIF Calculator shows the minimum for any balance and age, projects it year by year, and estimates withholding on amounts above the minimum for every province, including Quebec.

Open the RRIF Calculator →