The deadline, and why doing nothing is the one bad option
An RRSP cannot stay an RRSP forever. The rule is simple: by December 31 of the year you turn 71, the account has to be converted or closed. Not your 71st birthday, the end of that calendar year.
If you do nothing, the government does not just leave the money sitting there. The entire RRSP is treated as cashed out, which means the whole balance lands on your tax return as income in a single year. On a large RRSP that can push you into the highest tax brackets and cost a painful share of your life savings.
The good news is that this almost never happens. Your financial institution will typically contact you well before the deadline, and the fix is a short form. This is routine paperwork, not a crisis. Millions of Canadians have done it.
Your three options
There is no fourth choice and no way to extend the deadline, but you can mix and match: part of an RRSP can buy an annuity while the rest becomes a RRIF.
- Cash it out. You take the whole balance in one lump sum, and every dollar is taxable income that year. For most balances this triggers far more tax than the other two routes, which is why it is the least used option, though it can suit a very small account.
- Buy an annuity. You hand the money to an insurance company in exchange for a guaranteed payment for life or for a set number of years. You give up control and flexibility, and you gain certainty: the cheque arrives no matter what markets do.
- Convert to a RRIF, a Registered Retirement Income Fund. This is the most common choice. The money moves into the new account without being taxed, your investments stay invested and you draw an income from it over time. Only the withdrawals are taxed, in the years you take them.
What actually changes with a RRIF
Less than most people expect. A RRIF holds the same kinds of investments your RRSP did, at the same institution if you like. The balance keeps growing tax-sheltered. The conversion itself does not create a tax bill.
Two things do change. First, you can no longer put money in: a RRIF only pays out. Second, the government requires a minimum withdrawal every year, calculated as a percentage of the account balance. At 71 that percentage is 5.28%, and it rises a little each year. This is the deferred tax on decades of RRSP savings finally starting to come due, a bit at a time.
The timing is gentler than many expect: the first required withdrawal is not due until the year after the RRIF is opened. Convert in your age-71 year and the first mandatory payment comes the following year. You can always take more than the minimum. All RRIF withdrawals count as taxable income, and from age 65 they qualify as eligible pension income, which opens up the pension income credit and lets you split up to half the income with a spouse.
The younger-spouse election
When you set up a RRIF, you can choose to base the minimum withdrawals on your spouse's age instead of your own. If your spouse is younger, the required percentage is lower every year, which means less forced taxable income and more money left growing in the account.
This choice is made once, when the RRIF is opened, so it is worth knowing about before you sign the form. Electing a younger spouse's age does not stop you from withdrawing more whenever you want. It only lowers the floor.
Your last RRSP contribution
You can keep contributing to your own RRSP right up to December 31 of the year you turn 71, as long as you have contribution room. Room builds at 18% of earned income, up to a 2026 maximum of $33,810.
One wrinkle helps couples: if your spouse is younger than you, you can keep contributing to a spousal RRSP until the end of the year your spouse turns 71, using your own room. Your RRSP era ends at 71, but a younger spouse's account can keep accepting deposits.
A worked example
Frank turns 71 this year with $500,000 in his RRSP. In November he signs the paperwork to convert it to a RRIF. Nothing is taxed at conversion: the full $500,000 moves across and stays invested exactly as it was. The following year his first required minimum comes due, 5.28% of the balance, which on $500,000 works out to $26,400 for the year, about $2,200 a month. That withdrawal is taxable income; everything still inside the RRIF keeps growing tax-sheltered.
Calculated with the same 2026 CRA rules the TruePath engine applies.
How TruePath shows this
TruePath converts your RRSP to a RRIF automatically in your age-71 year and applies the required minimum in every projection year after that, using each spouse's own accounts. You can see the forced withdrawals arrive on your income timeline, watch what they do to your tax bill and your OAS and compare drawing the RRSP down earlier against leaving it until 71. The deadline and the factors are built in, so nothing about age 71 catches the plan by surprise.
Related questions people ask
Is converting an RRSP to a RRIF taxable?
No. The conversion itself moves the money from one registered account to another without any tax. Tax only applies later, on the money you withdraw from the RRIF, in the year you withdraw it.
What happens if I miss the deadline and do nothing?
The entire RRSP is treated as withdrawn, and the full balance becomes taxable income in one year. Financial institutions work hard to prevent this and will usually contact you months ahead, but the responsibility is ultimately yours, so the year you turn 71 is one to have on the calendar.
Can I convert my RRSP to a RRIF before 71?
Yes, at any age. Before 71 the minimum withdrawal is set by a formula: 1 divided by 90 minus your age. Some people convert at 65 so their withdrawals qualify as eligible pension income for the pension income credit and pension splitting. The trade-off is that mandatory withdrawals start sooner.
Can I still contribute to an RRSP after I turn 71?
Not to your own, after December 31 of that year. But if your spouse is younger and you still have contribution room, you can contribute to a spousal RRSP until the end of the year your spouse turns 71.
Do I have to sell my investments when I convert?
Usually not. Most institutions move the same holdings from the RRSP into the RRIF, so your stocks, funds and GICs simply carry on in the new account. It is a change of account rules, not a change of investments.
Sources
This page is general education about Canadian retirement rules, not personalised financial advice. Figures are for the 2026 tax year and change with government updates.