There is no minimum age for converting an RRSP to a RRIF, so you can convert as soon as you need retirement income. But you do have to convert your RRSP investments into some form of retirement income before the end of the calendar year in which you turn 71. You can make a contribution to your RRSP for that year as long as you contribute by December 31.
RRSPs & RRIFs
Retirement can be a wonderful time when you’re financially prepared for it. At Alterna we offer several services that can help you get the most out of your retirement funds.
RRSP eSavings Account
RRSP eTerm Deposits
At Alterna we also offer access to mutual funds through Qtrade Asset Management Inc., Qtrade Advisor and Qtrade Investor†.
You don’t have to make all your retirement decisions on your own. Our financial planners can help you build your nest egg and manage your RRSP or RRIF effectively. Just contact us to arrange a meeting. Your financial planner will help you create or adjust your plan so that it suits your retirement needs perfectly.
What is a RRIF?
Are you turning 71? Under current government regulations, you must convert all your Registered Retirement Savings Plans (RRSPs) to a retirement income option during the year you turn 71. You may also convert RRSP funds anytime before you turn 71 if you choose.
Two popular retirement income options are:
- Registered Retirement Income Funds (RRIFs), which operate similarly to an RRSP and provide retirement income for you and your spouse
- Annuities, which provide guaranteed income for life
Many people choose a RRIF. It can be invested just like an RRSP and continues to earn tax deferred interest on the balance, even while you are regularly withdrawing funds from the principal amount.
And, when you make a RRIF withdrawal at Alterna Bank, the payment is withdrawn from your term with the lowest interest rate (not all financial institutions take this into consideration).
RRIF Questions & Answers
When can I start to receive income from my RRIF?
Is retirement income taxable?
How do I choose my payment level?
Can I choose to base my RRIF payments on my spouse's birthdate?Expand/Collapse
2015 CRA RRIF Minimum Changes FAQ
What changes have been made to the RRIF minimums?
I have a RRIF that was issued prior to 1993 (i.e. Qualified RRIF). Do these changes apply?
When are these changes effective?
Will Alterna automatically reduce my 2015 minimum payment based on changes imposed by the 2015 Federal Budget?
What happens if I’ve already taken my minimum payment, or I do not want to modify my periodic payments for 2015?
How do I request a change to my payment amount?
How do I determine my eligibility for a re-contribution to my RRIF?
How long do I have to re-contribute my eligible amount?
What happens if I choose not to re-contribute the eligible amount?
Can I make a partial re-contribution?
I have more than one RRIF held by different institutions. If I choose to direct all of my eligible re-contributions to my RRIF held at Alterna, will Alterna provide me with a confirmation that I have not exceeded my total eligible re-contribution amount?
I am currently taking a specified payment amount over the old RRIF minimum, what amount am I eligible to re-contribute?
What will I receive when I make an eligible re-contribution?
When will my re-contribution receipt and eligible withdrawal amount letter get mailed to me?
RRSP Questions & Answers
What is an RRSP?
How much can I contribute?
What if I contribute too much money to my RRSP?
When should I start contributing to my RRSP?
What happens if I don't use my total RRSP deduction limit?
What is a spousal RRSP?
Should I pay down my mortgage or put money into my RRSP?
Borrowing for RRSPs
If you find you don't have enough cash on hand to make your maximum contribution or would like to take advantage of unused RRSP deduction room from previous years, borrowing may be the answer.
With an Alterna Investment Loan, the amount you'll save on taxes is often more than the interest you'll pay to borrow. To maximize your RRSP benefit, we recommend that you immediately apply your tax refund to the loan to reduce your borrowing costs. You should also try to pay off the loan as early as possible.
See how borrowing over a one-year period can get you a tax refund that is much higher than the cost of the interest you pay:
|Marginal tax rate:||41%|
|Cost of borrowing||$126.78|
Example is for illustrative purposes only. Please refer to your tax professional when considering borrowing to make an RRSP contribution to understand the potential tax refund.
Our Retirement Income Fund Calculator provides withdrawal minimums and payment options based on the consumption and length of the investment.
These calculators are made available to you as tools for independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy. All examples are hypothetical and are for illustrative purposes only. Please visit your branch to seek personalized advice from qualified professionals for all personal finance issues.
A Tax Free Savings Account (TFSA) is a flexible, easily accessible savings plan. It provides you with a great way to save for your short- or long-term financial goals or simply for a rainy day—and you will not owe tax on the interest you earn.
A Registered Retirement Savings Plan (RRSP) is an investment option that allows you to save for retirement and because it’s regulated by the Canadian government, RRSPs provide special tax benefits. For example, your annual contribution can reduce the amount of income tax you pay in that year and the money you put away can have years of tax-deferred growth potential. You only pay tax on the amounts you withdraw.
If you’ve already maximized your RRSP contributions, a TFSA is one of the many options that will help you save more of your hard-earned money.
With Alterna’s range of investment options, you’ll find safe and effective ways to purchase your first home, buy a new car, plan for a worry-free retirement or preserve your capital during your retirement years. Our financial advisors are here to help you save for the future while you continue to enjoy life today.
Talk to us. Whether you’re looking for a locked-in investment, one that’s easily accessible or both, we’ll help you find the retirement solution that’s best for you. Contact Alterna today to find out more.
Safe & Secure—with deposit insurance
Did you know that all eligible deposits held by clients at Alterna Bank are covered by the Canada Deposit Insurance Corporation (CDIC)? That means your funds are guaranteed up to $100,000 per qualifying account.
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