Home Retirement RRIF and LIF withdrawal rates: Everything you need to know

RRIF and LIF withdrawal rates: Everything you need to know

by admin

You do not have to wait until age 71 to convert your RRSP. Most people consider doing so once they have retired.

RRIF withdrawal rates

The minimum age at which you can convert an RRSP to a RRIF varies by province: it’s 50 in some, and 55 in others. But starting the year after conversion, you must begin to make minimum withdrawals from your RRIF. The table below includes the minimum withdrawal rates for all RRIFs set up after 1992. It shows the percentage of the account balance (at the previous year-end) that must be paid out in the current year.

Age at end of previous year Withdrawal rate for current year Age at end of previous year Withdrawal rate for current year
55 2.86%   76 5.98%
56 2.94%   77 6.17%
57 3.03%   78 6.36%
58 3.13%   79 6.58%
59 3.23%   80 6.82%
60 3.33%   81 7.08%
61 3.45%   82 7.38%
62 3.57%   83 7.71%
63 3.70%   84 8.08%
64 3.85%   85 8.51%
65 4.00%   86 8.99%
66 4.17%   87 9.55%
67 4.35%   88 10.21%
68 4.55%   89 10.99%
69 4.76%   90 11.92%
70 5.00%   91 13.06%
71 5.28%   92 14.49%
72 5.40%   93 16.34%
73 5.53%   94 18.79%
74 5.67%   95 or older 20.00%
75 5.82%  
Source: Rates calculated using the CRA’s prescribed factors formulas.

Locked-in retirement accounts (LIRAs)

The withdrawal rates above represent the minimum percentages that must be withdrawn, but account holders can make larger withdrawals if they need to or want to, as long as the account is not locked in.

Why do some Canadians have locked-in accounts? When a pension plan member leaves a pension, they may have the opportunity to transfer funds from their pension to a locked-in retirement account (LIRA). If they have a defined contribution (DC) pension, they may transfer the investments to a locked-in account. If they have a defined benefit (DB) pension plan and elect to receive a lump sum commuted value and to forgo their future monthly pension payments, they may be eligible to transfer some or all of the funds to a locked-in account.

A locked-in RRSP may also be called a LIRA. LIRA is the term used in B.C., Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, and Newfoundland and Labrador.

You can withdraw from an RRSP, but you cannot withdraw from a locked-in RRSP. The latter must be converted to the locked-in equivalent of a RRIF: a life income fund (LIF) is most common, although Newfoundland and Labrador has locked-in RIFs (LRIFs) and Saskatchewan and Manitoba have prescribed RRIFs.

LIF withdrawal rates

LIFs have the same minimum withdrawal rates as RRIFs. But they also have maximum withdrawal rates, which vary by province and territory, to prevent former pension plan members from spending their pension funds too quickly. The table below shows the maximum withdrawal rates for LIFs.

Age at end of previous year LIF/LRIF withdrawal rates:
B.C., Alta., Sask., Ont., N.B., N.L.
LIF withdrawal rates:
Manitoba, Quebec, Nova Scotia
LIF withdrawal rates:
federal, Yukon, Northwest Territories, Nunavut
55 6.51% 6.40% 5.16%
56 6.57% 6.50% 5.22%
57 6.63% 6.50% 5.27%
58 6.70% 6.60% 5.34%
59 6.77% 6.70% 5.41%
60 6.85% 6.70% 5.48%
61 6.94% 6.80% 5.56%
62 7.04% 6.90% 5.65%
63 7.14% 7.00% 5.75%
64 7.26% 7.10% 5.86%
65 7.38% 7.20% 5.98%
66 7.52% 7.30% 6.11%
67 7.67% 7.40% 6.25%
68 7.83% 7.60% 6.41%
69 8.02% 7.70% 6.60%
70 8.22% 7.90% 6.80%
71 8.45% 8.10% 7.03%
72 8.71% 8.30% 7.29%
73 9.00% 8.50% 7.59%
74 9.34% 8.80% 7.93%
75 9.71% 9.10% 8.33%
76 10.15% 9.40% 8.79%
77 10.66% 9.80% 9.32%
78 11.25% 10.30% 9.94%
79 11.96% 10.80% 10.68%
80 12.82% 11.50% 11.57%
81 13.87% 12.10% 12.65%
82 15.19% 12.90% 14.01%
83 16.90% 13.80% 15.75%
84 19.19% 14.80% 18.09%
85 22.40% 16.00% 21.36%
86 27.23% 17.30% 26.26%
87 35.29% 18.90% 34.45%
88 51.46% 20.00% 50.83%
89 or older 100.00% 20.00% 100.00%
Source: Office of the Superintendent of Financial Institutions and Empire Life.

There may be situations where locked-in account holders can make withdrawals that exceed the annual maximum. In Ontario, for example, there may be unlocking options for people experiencing financial hardship from:

You may also like

Leave a Comment