There are numerous rules concerning withdrawals from a Registered Retirement Income Fund (RRIF), a Canadian financial tool subject to Canadian laws. Account holders are required to begin withdrawing from the account starting at age 65 and must withdraw increasingly large amounts each year, according to RetireHappy. Exact minimum withdrawal amounts are subject to change and have been updated numerous times since their 1992 instatement, including a 2015 update that changed minimum withdrawal percentages for some people age 70 and above.Continue Reading
Required annual RRIF withdrawal amounts are determined by a percentage of the account balance coordinated with the account holder's age. For example, as of 2015, a 65 year old must withdraw 4 percent of the account. The next year, the percentage goes up to 4.17 percent.
Retirees are exempt from the minimum withdrawal amount during the first year they open the account. However, as soon as the account is a full year old, the minimum annual withdrawal percentages go into effect, according to TaxTips.ca. Withdrawing the required minimum amount from the account helps protect the money in the account from taxation, so it is a good idea for fixed-income retirees to stay current with their minimum withdrawal amounts in order to avoid paying taxes and losing some of the money held in the account.Learn more about Financial Planning