Eliminating the Registered Retirement Income Fund (RRIF) minimum withdrawal amount

Published: November 19, 2020
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Abstract

Mr. McCauley, MP, requested the PBO to cost the elimination of the annual RRIF minimum-withdrawal amount. As a result, RRIF holders would withdraw less, thereby reducing government revenues, as RRIF withdrawals are considered taxable income.

PBO has assumed that the annual minimum-withdrawal amounts will remain the threshold for determining whether RRIF withdrawals are subject to tax withheld at the source, in accordance with current rules.

PBO has assumed the policy would take effect on January 1, 2021.

The cost for the first full fiscal year, 2021–22, would be $940 million. The cost for the last year in the projection, 2024–25, would be $1,016 million.

Summary of key facts on Canadians over 70 years old who have a Registered Retirement Income Fund (RRIF) - 2018
Age group 70-74 75-79 80+ Total
Number of taxpayers 695 970 613 560 761 040 2 070 570
% of taxpayers who withdrew above the minimum 52% 41% 32% 41%
Average withdrawal ($) 12 046 11 224 8 907 10 645
Average amount held in a RRIF ($) 145 517 131 667 70 987 114 019
Sources: Canada Revenue Agency and Parliamentary Budget Officer.