Registered Retirement Income Fund
- Registered Retirement Income Fund
A Registered Retirement Income Fund or RRIF is a tax-deferred retirement plan under Canadian tax law. Individuals use an RRIF to generate income from the savings accumulated under their Registered Retirement Savings Plan. As with an RRSP, an RRIF account is registered with the Canada Revenue Agency.
Converting from RRSP
The option exists to convert an RRSP into an RRIF anytime on or before an individual reaches their 71st year. Before the end of the year in which an individual turns 71, it is mandatory to either withdraw all funds from an RRSP plan or convert the RRSP to an RRIF or life annuity. If funds are simply withdrawn from an RRSP, the entire amount is fully taxable as ordinary income; one defers this taxation by transferring investments in an RRSP into an RRIF.
Functionality
Investments held inside an RRIF grow in a tax-deferred manner just as with an RRSP. There are two primary difference between an RRSP and an RRIF. The first is that no further contributions can be made once conversion to an RRIF has occurred. The other is a special functionality called a minimum RRIF withdrawal. A minimum RRIF withdrawal is an annual obligatory amount which is cashed out of an RRIF and sent to the accountholder without withholding tax (meaning that the amount is tax free).
The minimum RRIF withdrawal each year is determined by a percentageref|age, depending on the holder's age, of the total value of the plan on January 1 each year. The holder of an RRIF may elect to withdraw an amount greater than the minimum RRIF amount for that year, though withholding tax will apply to this supplementary amount.
ee also
* Canada Revenue Agency
* Income Tax
* Registered Retirement Savings Plan
* Retirement
References
* [http://www.kawarthacu.com/rrif.html kawarthacu.com: minimum RRIF withdrawal by age]
External links
* [http://www.efficientmarket.ca/ Efficient Market Canada - RRSP/RRIF Canadian Investment Magazine]
* [http://money.mytelus.com/rrsp/rrif_faq.asp money.mytelus.com: RRIF FAQ]
* [http://www.rbcroyalbank.com/RBC:Q5IcIY71A8MAAQBcYos/cgi-bin/retirement/c_incpay.pl rbcroyalbank.com: Minimum Annual Income Payment Calculator]
Wikimedia Foundation.
2010.
Look at other dictionaries:
Registered Retirement Income Fund - RRIF — A retirement fund similar to an annuity contract that pays out income to a beneficiary or a number of beneficiaries. To fund their retirement, RRSP holders often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the… … Investment dictionary
Registered Retirement Savings Plan — A Registered Retirement Savings Plan or RRSP is an account that provides tax benefits for saving for retirement in Canada. RRSP refers to a provision in the Income Tax Act that allows a person to shelter financial property from income taxes.RRSPs … Wikipedia
Life Income Fund - LIF — In Canada, a type of registered retirement income fund that is used to hold pension funds, and eventually payout retirement income. The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that… … Investment dictionary
Income trust — An income trust is an investment trust that holds income producing assets. The term also designates a legal entity, capital structure and ownership vehicle for certain assets or businesses. Its shares or trust units are traded on securities… … Wikipedia
Registered Retirement Savings Plan - RRSP — A legal trust registered with the Canada Revenue Agency and used to save for retirement. RRSP contributions are tax deductible and taxes are deferred until the money is withdrawn. An RRSP can contain stocks, bonds, mutual funds, GICs, contracts… … Investment dictionary
Retirement Compensation Arrangements — (RCAs) are defined under subsection 248(1) of the Canadian Income Tax Act , which allows 100 per cent tax deductible corporate dollars to be deposited into an RCA, on behalf of the private business owner and/or key employee. No tax is paid by the … Wikipedia
Registered Education Savings Plan — A Registered Education Savings Plan, or RESP, is a savings account used by parents to save for their children s post secondary education in Canada. The principal advantages of RESPs are the access to the Canada Education Savings Grant (CESG) and… … Wikipedia
Locked-In Retirement Account - LIRA — A type of registered retirement savings alternative that locks in the pension funds in investments. While the funds are locked in, they are unavailable for cash out. Pension funds that are transferred to a LIRA are used to purchase a life annuity … Investment dictionary
National Social Security Fund (Uganda) — National Social Security Fund Type Parastatal Industry Social Security Founded 1986 Headquarters 14th Floor Workers House, Plot 1 Pilkington Road, Kampala, Uganda Key people Vincent Ssekono … Wikipedia
Exchange-traded fund — An exchange traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.[1] An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs… … Wikipedia
