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RRIF surplus management, in plain terms

In your late 80s and 90s, the RRIF minimum can be more than you actually want to spend. Here is what to do with the extra.

When surplus appears

•From your late 80s on, the minimum rate (8–20%) can exceed your real spending needs.
•You're forced to withdraw the full minimum and pay tax on it, even if you don't spend it.

Where the surplus goes

•Reinvest to a TFSA — the surplus keeps growing tax-free and can be drawn back later with no tax. This is the cleanest option.
•Move it to a non-registered account — still invested, but future growth is lightly taxed (capital gains at 50% inclusion).
•Gift it to family or charity if you genuinely don't need it.

Why it's better to prevent it

•Reinvesting surplus still means you paid the tax on the withdrawal — you can't get that back.
•Large surplus withdrawals can trigger OAS clawback and age-credit phase-outs.
•The real fix is shrinking the RRIF earlier via tax-smoothed RRSP draws before 71, so the minimums stay manageable.

Watch for surplus years

The Sequencer flags years where the RRIF minimum exceeds your spending and reinvests the surplus to TFSA.