When you transfer your savings to one of these income accounts, the government mandates certain withdrawal rules. These are called RRIF minimums.

Essentially the government is saying you can’t defer taxes forever. It’s time to start claiming some of your nest egg as income. And it goes on a specific schedule set out by the CRA.

For example at age 71 it's 5.28% of your balance at the beginning of the calendar year. This percentage increases every year to age 95 in which it stops at 20%.

So if you have a million dollars in your RRSP, you have to withdraw $52,800 in the year you turn 71.

Any withdrawals made from RRIF accounts, or any of the accounts above, must be claimed as income for the year. Taxes will have to be paid accordingly.

However, your financial institution may not withhold enough taxes. That’s because CRA does not require taxes withheld on RRIF minimums.

In the example above, $52,800 will come to your bank account without any taxes paid. Then when you file your income tax return, you will have to pay CRA tax on that $52,800.

This can get some retirees in trouble if they go spending their withdrawals without first submitting their taxes owed.

You can submit your taxes in two common ways:

Married and common-law partners can choose whose age they want to base RRIF minimums on.

The most common practice is to use the younger of the two. This allows for the most flexibility in mandatory minimum withdrawals.

Especially if you’re trying to manage taxable incomes.

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If you’ve done exceptionally well for yourself and have a large amount of household savings, RRIF minimums can topple you over the OAS threshold.

Old Age Security is a retirement benefit paid to all Canadians over the age of 65 provided their previous year's income was less than $90,777 and they met the Canadian residency requirements.

If you’ve managed to save a couple million dollars in pensions, and another $500,000 in your RRSPs, your total retirement incomes could easily put you over the $90,777 threshold.

Here are some strategies you can deploy to avoid this:

You can name one or multiple beneficiaries on your RRIF. You’ll want to do this so that your RRIF balance is not calculated as part of your final probate fees.

In Saskatchewan, probate fees are $7 per $1,000 of assets. If you have a $600,000 RRIF, probate fees would be $4,200.

This is not to be confused with taxes.

Your estate will be required to settle the taxes from the sale of your RRIF even when you name a beneficiary.

Taxes can be deferred if your beneficiary is:

Certain rules must be followed below.

Married and common-law partners can and should name their spouses as Successor Annuitant.

This means, when you die, your RRIF will remain open and payments will continue to your surviving spouse's name without having to sell your investments.

Alternatively, you could name your spouse as beneficiary.

In this scenario, your RRIF assets would be sold and the funds would be transferred to your spouse to be rolled into their RRIF or RRSP.

This can create added stress and paperwork during a difficult time or create unnecessary selling costs associated with the investments inside the RRIF.