From saving to spending
The tools that helped you accumulate savings — RRSPs, TFSAs, investments — don't automatically translate into retirement income. At some point you need a plan: how much to draw from each account, in what sequence, and how to manage the annual tax impact without running out too early.
The right strategy depends on the size of your savings, other income sources like CPP and OAS, your health, and how long you want your money to last. The time to build that plan is before you retire, not after — because options close off once you start drawing.
Retirement income tools
RRIF
Registered Retirement Income Fund
When you're ready to draw from your RRSP, the plan converts to an RRIF. A minimum withdrawal is required each year (the percentage increases with age), and each withdrawal is taxed as ordinary income. The remaining balance continues to grow tax-deferred.
LIRA
Locked-In Retirement Account
When you leave a job that had a pension plan, the accumulated pension funds often transfer into a LIRA. The money is locked in until retirement and cannot be accessed the way an RRSP can, but it grows tax-sheltered until you are ready to convert it to income.
LIF
Life Income Fund
A LIF is the income-drawing version of a LIRA, similar to how an RRIF is the income version of an RRSP. Withdrawals are subject to both a minimum and a maximum amount each year, set by government formula. This puts a ceiling on how quickly you can draw down locked-in pension funds.
Fixed annuities
Guaranteed income for life or a fixed term
An annuity converts a lump sum into a guaranteed income stream. Fixed annuities offer a set rate of return — capital grows tax-deferred and the income payout is predictable and guaranteed. A strong choice for those who value certainty over flexibility.
Variable annuities
Market-linked income with annuity structure
Similar to fixed annuities in structure, but returns are tied to an investment portfolio rather than a fixed rate. Higher growth potential in good markets, with the same income framework and tax treatment as a fixed annuity.
Insured Retirement Plans
An Insured Retirement Plan (IRP) is a tax-planning strategy that uses a permanent life insurance policy to supplement retirement income. You build cash value inside the policy over your working years, then borrow against that cash value tax-free in retirement to generate income. The policy's death benefit repays the loan, and the residual goes to your estate.
IRPs work well for individuals who have already maximized their RRSP and TFSA room and are looking for additional tax-efficient ways to build and access wealth. The specifics depend on your tax bracket, health, and overall financial picture — not a strategy for everyone, but a meaningful one for the right person.
Service area
Jatinder Singh and his team serve clients across Ontario and Alberta. Appointments are available in person at 195 Queen St E, Brampton, or by phone.