Janine will celebrate her 71st birthday this year. She currently has a lot of money in a personal registered retirement savings plan (RRSP) and knows there are rules about what she can do with those funds. Which of the following is TRUE?
A.
She can convert her RRSP to a locked-in retirement income fund (LRIF).
B.
She can convert her RRSP to a registered retirement income fund (RRIF) this year or by December 31st of next year.
C.
She can take the entire amount in cash, with no tax consequences because her RRSP funds were tax-sheltered.
D.
She can purchase a registered term or life annuity.
A registered retirement savings plan (RRSP) is a retirement savings and investing vehicle for employees and the self-employed in Canada. Contributions to an RRSP are tax-deductible and grow tax-deferred until withdrawal. However, RRSPs have a maturity date of December 31st of the year in which the holder turns 71. By then, the holder must convert the RRSP to a registered retirement income fund (RRIF), purchase an annuity, or withdraw the funds in cash (subject to tax). Therefore, B is the correct answer. References: Registered Retirement Savings Plan (RRSP): Definition and Types, Registered Retirement Savings Plan (RRSP) - Canada.ca
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