Benefits
of converting to a Registered Retirement Income Fund (RRIF)
Author:
News Canada
(NC)—If
you have been contributing to a Registered Retirement Savings Plan (RRSP)
and are turning 69 this year, you will have to either convert or close your
RRSP by December 31. Here are some of the benefits of converting your RRSP
investments into a RRIF:
1.
Extended tax deferral. Your capital continues to grow tax–sheltered
inside your RRIF. Your funds are taxed only when you withdraw them.
2.
Income flexibility. You can withdraw as little or as much as you need each
year (subject to a required annual minimum).
3.
Investment control. You can choose the type of investments you want and can
be as involved as you like in ongoing decision-making.
4.
Inflation protection. A properly diversified mix of investments may provide
you with growth potential and security.
5.
Long-term payments. A well-planned RRIF should provide you with income throughout
your retirement.
6.
Estate planning. Upon your death, the tax deferral benefits can be continued
by passing your RRIF assets directly to your spouse or common-law partner,
or in certain circumstances, a financially dependent child or grandchild.
This article is not applicable in Quebec.
-
News Canada
