When should I convert my RRSP to a RRIF?

Converting your RRSP to a RRIF (Registered Retirement Income Fund) 

A key decision as you approach retirement. Here are some guidelines to help you determine the right time:

1. By the End of the Year You Turn 71
     - The government requires you to convert your RRSP into a RRIF or another retirement income option (such as an annuity) by **December 31 of the year you turn 71**. If you don’t convert it by then, the entire RRSP amount becomes taxable income for that year.
2.  When You Need Income
     - You can convert your RRSP to a RRIF anytime before you turn 71, typically when you start needing regular income during retirement. A RRIF provides flexibility because you can decide how much to withdraw (above the minimum), allowing you to manage your taxes and income more efficiently.
3. Tax Efficiency
     - While your RRSP grows tax-deferred, withdrawals from a RRIF are taxable. If you’re in a lower tax bracket in retirement than during your working years, it makes sense to delay withdrawals until you’re in a position to benefit from lower tax rates.
4. To Avoid Mandatory Withdrawals
     - Once you convert to a RRIF, you are required to withdraw a minimum amount each year, which is taxable. If you don’t need income yet, you may want to wait as long as possible before converting to avoid triggering taxable withdrawals early.

Summary
- Mandatory: Convert by age 71.
- Flexibility: Convert earlier if you need income.
- Tax planning: Consider timing based on your income and tax situation.

Talking to Frank Gasper can help you assess the best time for your specific situation.