FAQs
Once you retire, you can convert it into a Registered Retirement Savings Plan (RRIF. + read full definition ) or annuity. + read full definition , to provide a regular stream of retirement income. Or you can withdraw your savings in cash.
What happens to the money in an RRSP when you retire? ›
At any age up to the end of the year you turn 71, you can choose one of the following options for your RRSPs: You can transfer your RRSP funds to a registered retirement income fund (RRIF). Starting in the year after the year you establish a RRIF, you have to be paid a yearly minimum amount.
Can I withdraw my RRSP if I leave Canada? ›
If you have an RRSP and you move out of Canada permanently, you can either choose to: Make a lump sum withdrawal and deregister your RRSP. You'll have to pay withholding tax and income tax on the amount withdrawn. Keep your RRSP and have your investments grow tax-deferred for Canadian tax purposes.
What happens to RRSP after 70? ›
In the year you turn 71 years old, you have to choose one of the following options for your RRSPs: withdraw them. transfer them to a RRIF. use them to purchase an annuity.
How long do you have to pay back RRSP? ›
You have up to 15 years to repay to your registered retirement savings plan (RRSP), pooled registered pension plan (PRPP) or specified pension plan (SPP) the amounts you withdrew from your RRSP under the Home Buyers' Plan (HBP).
At what age can you withdraw RRSP in Canada? ›
Your RRSP reaches maturity on the last day of the calendar year you turn 71. At this point, you can access your RRSP assets through 3 maturity options. The tax implications of your decision depend on the option that you choose.
How much does the average Canadian have in RRSP when they retire? ›
$129,000. According to Ratehub, the average 65-plus-year-old Canadian has $129,000 saved in their RRSP. The figure rises to about $160,000 if you include the Tax-Free Savings Account (TFSA).
What happens to my RRSP if I move to the US? ›
Canadian citizens who live and work in the United States may contribute to an RRSP as long as they keep within the contribution threshold. Canadians may keep their RRSP intact when they move to the United States and let the income grow tax-deferred for Canadian tax purposes.
Is it worth it to withdraw from RRSP? ›
You'll miss out on the advantages of compound interest
This is compound interest. When you take money out of your RRSP early, you lose the opportunity to earn money while it's invested. Remember, the government will not tax you on money growing in your RRSP until you take it out.
Can I withdraw from RRSP as a non-resident? ›
By withdrawing the RRSP funds while a non resident, generally the lower of the non resident withholding tax rate and the amount taxable under section 217 will apply, providing the individual with a unique opportunity to withdraw RRSP accumulations at much lower rates of tax than would otherwise be payable if they were ...
Spousal RRSPs come with a three-year attribution rule, which only permits withdrawals three years after the deposit date. So, for example, if you deposit funds into a spousal RRSP on January 1, 2024, your spouse or common-law partner won't be able to withdraw the funds until January 1, 2027.
What happens if you don't convert RRSP to RRIF? ›
If instead of transferring into a RRIF, you choose to withdraw your RRSP as a lump sum, then it is treated as taxable income – which could result in a substantial tax hit.
Can I convert my RRSP to an annuity? ›
Before December 31 in the year you turn 71, you have two options when it comes to your RRSP: You can convert it to an annuity, or roll your funds over to a Registered Retirement Income Fund (RRIF).
What happens to RRSP if you leave Canada? ›
Canadian citizens that have become non-residents can continue to hold RRSPs after leaving Canada.
Can I withdraw my RRSP when I retire? ›
You can withdraw from most RRSPs before or after you retire. But it's important to understand how and when you make a withdrawal impacts your taxes.
How much do I lose if I cash out my RRSP? ›
Just know that you'll have pay tax on any RRSP withdrawals (10% on withdrawals up to $5,000, 20% on withdrawals above $5,000 and up to $15,000, and 30% for withdrawals above $15,000).
Why is it unwise to withdraw money from an RRSP before retirement? ›
RRSP withdrawals at age 55
Plus, the withdrawal increases your taxable income for the year, which could bump you into a higher tax bracket. And the money you withdraw reduces your RRSP contribution room, which limits your future retirement savings potential.
Can you convert RRSP to annuity? ›
Before December 31 in the year you turn 71, you have two options when it comes to your RRSP: You can convert it to an annuity, or roll your funds over to a Registered Retirement Income Fund (RRIF).
What happens to unused RRSP contributions? ›
If you withdraw the unused contributions, you have to include them as income on your income tax and benefit return. However, you may be able to deduct an amount equal to the withdrawn contributions that you include in your income.