Should I open a RRIF at age 55?

Question: I am 55 and am unemployed with not many prospects. My adviser suggests that I place my RRSPs (approximately $100,000) in GICs into a RRIF plan in order to have a monthly income. I have mutual funds and some bonds. Would I be better off with another plan — perhaps a withdrawal plan from my mutual funds? – W.D.R.


The main problem with converting RRSP assets to a RRIF at your age is that there is no mechanism for reversing the decision later. If circumstances should change and you get another job, you’d still have to withdraw income from the RRIF. That would increase your tax burden and deplete the RRIF’s capital.

If you keep the RRSP, you leave your options open. You can make withdrawals from the plan if you need the money. These will be taxed as income, exactly the same as if they had come from a RRIF. The difference is that you retain the option to stop making withdrawals if your situation changes. So there is a flexibility in this approach that the RRIF does not provide.

We suggest you discuss the situation with your advisor in this context and see what he/she has to say. – G.P.