Receiving income from an RRSP

If you are near retirement, you may be thinking about getting regular income from your RRSP.

You generally have a certain amount of flexibility on the types of income you can receive. Contact your RRSP issuer to find out what your options are.

For more information, see RRSP options when you turn 71. At any age up to the end of the year you turn 71, you can choose one of the following options for your RRSPs:

You can transfer your RRSP funds to a registered retirement income fund (RRIF).

Starting in the year after the year you establish a RRIF, you have to be paid a yearly minimum amount. The payout period under your RRIF is for your entire life. Your RRIF carrier calculates the minimum amount based on your age at the beginning of each year. However, you can elect to have the payment based on your spouse's or common-law partner's age. You must select this option when filling out the original RRIF application form. Once you make this election, you cannot change it.

Your RRSP issuer will not withhold tax on amounts that are transferred directly to a RRIF. You may have to pay tax on the income when you start receiving payments from the RRIF. Enter these payments as income on your income tax and benefit return for the year you receive them. For more information, see Transferring.

You can use your RRSP funds to purchase an annuity.

Annuities offer a guaranteed income for life or for a specified period. Your RRSP issuer will not withhold tax on amounts that are used to purchase an annuity. You may have to pay tax on the income when you start receiving payments. Enter these payments as income on your income tax and benefit return for the year you receive them.

Annuity payments are shown in box 16 of a T4RSP slip, Statement of RRSP Income. Report the income on line 12900 of your income tax and benefit return. Claim any tax deducted from box 30 of your T4RSP slip on line 43700 of your return.

You may have received commutation payments from an RRSP.
A commutation payment is a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan. If your spouse or common-law partner contributed to your RRSP, see Withdrawing from spousal or common-law partner RRSPs.

If the commutation payment from your RRSP is transferred to an RRSP, a RRIF, a PRPP, a SPP, or to buy yourself an eligible annuity, see Commutation payments from your RRSP.

Commutation payments are shown in box 22 of a T4RSP slip. Report the income on line 12900 of your income tax and benefit return and claim any tax deducted from box 30 of your T4RSP slip on line 43700 of your return.

Your RRSP may now be an amended plan.

If, in 2023, your RRSP was changed and it no longer satisfies the rules under which it was registered, it is no longer an RRSP. It is now an amended plan or fund. In such a case, we consider you to have received in 2023 an amount that equals the fair market value of all the property the plan held at the time it ceased being an RRSP. If the deregistration was from your spousal or common-law partner RRSP, see Withdrawing from spousal or common-law partner RRSPs.

Amounts deemed received on deregistration of an RRSP are shown in box 26 of a T4RSP slip. Report the income on line 12900 of your income tax and benefit return. Claim any tax deducted from box 30 of your T4RSP slip on line 43700 of your return. Tax will be withheld only if the amount is paid in the year of deregistration.

You may have other income and deductions from an RRSP.

You may have to include other RRSP amounts in your income, or you may be able to deduct other amounts for 2023. This applies if, in 2023, your RRSP trust holds at any time a non-qualified investment or disposed of a non-qualified investment. It also applies if trust property was used as security for a loan, sold for an amount less than its fair market value, or the trust acquired property for an amount more than its fair market value.

Other income and deductions from an RRSP are shown in box 28 of a T4RSP slip. Report the income on line 12900 of your income tax and benefit return. If the amount appears in brackets (negative amount), claim it on line 23200 of your income tax and benefit return.

You can withdraw your RRSP funds.

When you withdraw funds from your RRSPs, your RRSP issuer may withhold some tax. For more information, see Withdrawing from your own RRSPs.

Forms and publications

• Guide T4040, RRSPs and Other Registered Plans for Retirement