Retirement Income Options (RIOs) are plans that act as sources of income after you retire, using the money you saved during your working years. The most common type of RIO is a Retirement Income Fund (RIF).1 A RIF uses the savings from your Retirement Savings Plan (RSP) to provide you with a steady, dependable source of income. Other than a minimum annual amount set by the federal government, you have the freedom to choose the amount you want to receive each year and you only pay tax on the money withdrawn from your RIO.
A RIO is also available for your Locked-in RSP (LRSP), Locked-in Retirement Account (LIRA) or Restricted Locked-in Savings Plan (RLSP) in the form of a Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF), Restricted Life Income Fund (RLIF) or Prescribed Retirement Income Fund (PRIF) depending on the governing legislation of the original pension plan.
By keeping the majority of your funds in a RIO and withdrawing a predictable, manageable amount each year, you can continue to enjoy the benefits of tax-deferred growth and an additional source of income during retirement.
You have the option to convert your RSP into a form of retirement income at any time, but it must be done by the end of the calendar year in which you turn 71. At that time, you’ll have three choices: