Turning 71

August 2019 – If you are turning 71 this year, and have a Registered Retirement Savings Plan (RRSP), you must close this plan before December 31st or the entire amount will treated as taxable income for 2019. You have two options to avoid this. You can either transfer your RRSP to a Registered Retirement Income Fund (RRIF), or buy an annuity, then start taking taxable income by no later than next year. A RRIF will allow you the most flexibility and control over your investments and income, and potentially provide an estate value. An annuity will provide you with the most security as it provides you with guaranteed lifetime income for you, and your spouse if you so elect, but has no estate value beyond any guarantee period. Be sure to get professional advice before making your decision as you will have several options on how to you wish to set up either type of arrangement. Take care though. While you can transfer your RRIF to an annuity at a future time, once you buy an annuity it is non reversible. Before finalizing your arrangements get professional advice and discuss whether making one last RRSP contribution before transferring to a RRIF/annuity makes sense for your situation.