top of page


RRSP registered retirement saving plan ottawa

At 71, Canadians must close their registered retirement savings plans (RRSPs). How much you have in your RRSP depends on how long you’ve been contributing. However, the average Canadian senior has around $130,000 saved. What do you do with all that money?

Here are some tips for closing your RRSP when you turn 71.



You have four choices when closing your RRSP. You can:

  1. Take the money in cash

  2. Transfer your RRSP to a registered retirement income fund (RRIF)

  3. Purchase an annuity

  4. A combination of any of the above

The option you choose will depend on many different factors.

  • Cashing out your RRSP Any money you withdraw from your RRSP is taxable income. This means that you must declare it on your personal income taxes. If you cash out your RRSP, you’ll have to pay a lot of taxes. Therefore, the cash option may not be the best. However, you may need cash to pay off your mortgage or pay down debts. You can get advice from a debt counselling service about the best way to retire debt-free.

  • RRIFs An RRIF is like an RRSP. However, you withdraw rather than contribute. An RRIF still provides the tax shelter of an RRSP, but you still need to pay tax on any money you take out. RRIFs are flexible and can include stocks, bonds, GICs, mutual funds and fixed income securities. Consequently, your money can continue to grow while it provides you with a retirement income. Over time, you must withdraw an increasing percentage of your RRIF.

  • Annuities Purchasing an annuity decreases the risk that you’ll outlive your retirement savings. You invest money from your RRSP with a life insurance company and pay a monthly or annual fee. In exchange, you get a guaranteed income for the rest of your life and don’t have to worry about market fluctuations. However, you must pay taxes on that income.

Most people choose a combination of cash, an RRIF, and an annuity. It’s best to seek the advice of a knowledgeable financial expert before making your final decision because you may not be able to change your mind moving forward.



The team at D. & A. MacLeod Company Ltd. can help you achieve financial freedom in retirement. Our credit counselling services have been helping people in Ontario get out of debt and achieve financial peace of mind for more than 65 years. Schedule a free consultation with one of our licensed insolvency trustees today.


bottom of page