When to consider extra RRIF withdrawals

Minimum RRIF withdrawals 

There are minimum required withdrawals from a registered retirement income fund (RRIF) each year. If you convert your registered retirement savings plan (RRSP) to a RRIF at age 71, for example, your withdrawals at age 72 must be at least 5.28% of the year-end balance for the previous year. 

In your 91st year, Robert, you will be required to take a minimum of 11.92%. The withdrawal rate rises each year and unless your RRIF is consistently generating more than 10% annualized returns, your account is likely declining in value in your 80s. 

The 10-year annualized returns for the TSX and S&P 500 over the past decade have been 12.43% and 9.81% respectively as of March 27, 2026. This includes dividends and, in the case of the S&P 500, is converted to Canadian dollars. Most RRIF investors are not all-in on stocks, and most investors do not keep 100% of the returns the market offers. But an aggressive investor could certainly keep their RRIF value steady or increasing for an extended period if markets cooperate, as they have recently. 

There has been lobbying in recent years to decrease the minimum required withdrawal from RRIF accounts. The required minimum distribution (RMD) for retirement accounts in the US is lower than Canadian RRIF accounts. Nonetheless, there may be reasons to take more than the minimum out strategically for some retirees. 

OAS clawback

One thing a retiree needs to be particularly mindful of with extra RRIF withdrawals is Old Age Security (OAS) clawback. If your income exceeds about $95,000 for 2026, you could be subject to a pension recovery tax of 15 cents on the dollar that effectively increases your tax rate by 15% along with regular tax rate increases. 

Depending on your province or territory of residence, you can be subject to an effective tax rate of more than 60% if your OAS is clawed back. 

You mentioned, Robert, that you do not qualify for OAS. I suspect your income must be over $150,000 per year, which is quite high for a 91-year-old. 

A numerical example

Here is a simple example why extra RRIF withdrawals could make sense for someone like you.

If your income is $150,000 and you take an extra $50,000 of fully taxable RRIF withdrawals, depending where you live, your incremental tax could be about 40%. That would mean $20,000 of tax on the $50,000 withdrawals, leaving you with $30,000 after tax each year. After 5 years, you will have withdrawn a cumulative $150,000 after tax. 

I hope you live to 101, Robert, but for simplicity, we might assume someone in their 90s only lives 5 more years. After 5 years, if someone died with a large RRIF account and an otherwise high income, some or all of their RRIF balance could be taxable at over 50%. Once again, this varies between provinces and territories. 

If you were to instead forgo the 5 years x $50,000 of extra withdrawals and leave that $250,000 in your RRIF instead, it could be just $125,000 after tax for your estate. By comparison, the 5 years of annual $50,000 withdrawals were a cumulative $150,000 after tax—a better outcome. 

This example ignores investment growth, but when the time horizon is short or the tax differential during life and upon death is significant, this extra withdrawal strategy can be worthwhile. 

Your strategy to max out your tax-free savings account (TFSA), Robert, makes sense. If you have extra money you are investing in a non-registered account, you could consider using that to instead give cash to your kids or grandkids. Obviously, you want to ensure you have sufficient savings for the rest of your own life—including a buffer for long-term care costs—before giving away money. You may or may not be able to count on your kids or grandkids to pay for those costs if you give away too much. 

As you mention, a gift is tax-free in Canada. A withdrawal from an investment account may trigger tax to the account holder. But a gift is not taxable itself. An exception may apply for a US citizen who could be subject to US gift tax rules. 

Summary

My quick math suggests that you may pay less lifetime tax with your strategy to take extra RRIF withdrawals, Robert. But people should consider their own financial situation closely.

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About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. and Objective Tax & Accounting Inc. in Toronto. He does not sell any financial products whatsoever.