A Registered Retirement Income Fund (RRIF) is a flexible income-producing investment that tax shelters your savings while allowing you to withdraw retirement income.
Features and benefits of an RRIF:
Flexibility in how much income you draw while minimizing the income tax you will pay
No withdrawl maximum
Grow your investments tax-free
Note: money withdrawn counts as income, meaning you'll have to pay income taxes on it.
RRSPs and RRIFs both allow for tax-deferred growth and interest growth, meaning your balance grows until it's withdrawn.
The primary difference between the two plans is that RRSPs is a tax-free savings plan used to invest for your retirement while RRIFs are tax-sheltered (you only pay taxes on what you withdraw) that allows you to take out income in retirement.
One is a savings plan (Registered Retirement Savings Plan), the other is an income fund (Registered Retirement Income Fund).
Think of an RRIF as a basket of investments. You can invest in your RRIF with:
term deposits (e.g. GICs)
equity (e.g. mutual funds)
fixed income (e.g. stocks and bonds)
0 to $5000
$25,001 and over
0 to $5,000
$5,001 and over