• RRIFs
• LIFs
• RIO Choices

Retirement Income Options

All Canadians may choose from three different ways of generating retirement income from

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their RRSPs. There are 3 RIO options available to everybody and 5 more choices only available to some:

1. A Registered Retirement Income Fund (RRIF) which puts you in control of your investments and the amount of income it pays you.
   
   A RRIF, or a Registered Retirement Income Fund, continues an RRSP beyond the age of 69 with the stipulation that the owner withdraws a minimum annual payment from the fund. Although each withdrawal is taxable as income, RRIF funds remain tax-sheltered while on deposit.
   
   RRIFs are tax-sheltered plans that pay out your accumulated RRSP assets over a number of years. With a RRIF, you have control over the pay out schedule, you continue to choose your investment options and the assets in the RRIF continue to grow tax deferred.
   
   
2. A Life Annuity which guarantees a fixed income.
   
   A Life Annuity is a contract between you (the Annuitant) and a Life Insurance Company that will provide you with payments for life, regardless of the number of years you live. This option is best suited for people who prefer security over all other aspects of their retirement income.
    
   
3. A Term Certain Annuity to Age 90 (TCA 90) gives you some control over your investments and earnings.
   
   A TCA 90 is a RIO that pays out the full amount of principal and income earned in regular scheduled payments by age 90. This is best suited for people seeking security for their investment with the chance to react to changing economic conditions.

Five more choices that apply to some are:

1. In most jurisdictions you have the additional option of a Life Income Fund (LIF) which combines the benefits of both a RRIF and a Life Annuity.
   
   A LIF provides flexibility in the early years of your retirement and security in later years. It is available for those with Locked-In funds in RRSPs (except SK) or Registered Pension Plans. 
   
2. Alberta, Manitoba, Ontario, and Newfoundland & Labrador permit a fifth choice, a Locked-In Retirement Income Fund (LRIF).
   
3. Saskatchewan pension legislation now permits the annuitant to transfer 50% of a LIF/LRIF to a MB RRIF.
   
4. The Income Tax Act Regulations were amended to 2005 to permit Variable Benefit (RRIF type payments) from a money purchase pension plan (defined contribution pension plan). Saskatchewan pension legislation was amended May 10, 2006, to permit this option with terms very similar to a SK RRIF.

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