RRSP at Maturity: Converting to Retirement Income
A Registered Retirement Savings Plan (RRSP) is a federal retirement savings vehicle. The plan must be terminated by the end of the year you turn 71, and you need to transfer the funds or purchase a retirement income product. This article is based on official Canada Revenue Agency (CRA) information.
Transfer Options
According to the CRA, you can transfer RRSP funds directly to:
- Registered Retirement Income Fund (RRIF)
- Registered Pension Plan (RPP)
- Specified Pension Plan (SPP)
- Deferred Profit Sharing Plan (DPSP)
- Pooled Registered Pension Plan (PRPP)
- First Home Savings Account (FHSA)
You may also use RRSP funds to purchase an eligible annuity.
Tax Rules for Direct Transfers
To ensure tax-deferred treatment, you must ask the payer to transfer funds directly. Direct transfers to an RRSP generally do not affect your RRSP deduction limit, but in some cases you may need to include an amount in income and claim an offsetting deduction.
Age Limit
If you transfer funds to an RRSP, you must be 71 or younger at the end of the year in which you transfer. After that, the RRSP must be terminated.
More Information
The CRA provides a dedicated page on RRSP options when you turn 71.
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