Registered Retirement Income Fund.

In Canada, the government has a tax deferral plan to encourage canadians to save for their retirement to reduce the burden on the canada pension plan. People can contribute money up to a certain limit each year to an RRSP and not pay taxes on it until retirement, when they'll often have a lower tax rate than in their peak earning years, not to mention have more money because it's been able to grow without being taxed as it goes along. Anyhow, once you retire or reach the age of 69, you must do one of three things with all funds you hold registered in an RRSP: 1. you can deregister all the funds in a lump sum and pay a fat chunk of with-holding tax on it all. This isn't advisable, as you'll end up paying tax at a super high rate. 2. you can move it in to your spouse's RRSP if they have contribution room - this is sometimes wise if your spouse is younger than you, as the money can continue growing tax-free without any requirements that you withdraw it. Also, if you make a lot more money than your spouse, it allows a degree of income splitting, which can be advantageous for tax reasons as well.

However, most people go for option 3.: move it in to a RRIF.

A Registered Retirement Income Fund is registered with the government, and like an RRSP allows your money to grow tax free. However, unlike an RRSP, it has the requirement that you withdraw at least a minimum amount of it each year, which is then taxed based on your income for that year.

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