Retirement Withdrawal Order: RRIF First, TFSA First or Blended?

Frequently asked questions

Should I withdraw from my RRIF or my TFSA first?

For most people with a large RRIF, RRIF first. Drawing it down in low-income years saves tax and shrinks the RRIF before the minimums at 72 and beyond push you into higher brackets and the OAS clawback, and before the estate tax bill gets large. TFSA first keeps tax-free growth but leaves a bigger taxable RRIF for later. It works best when your other income is already high.

What is the RRIF minimum withdrawal?

A percentage of the balance at the start of each year, set by the CRA. It is 5.28% at 71, 6.82% at 80, 11.92% at 90 and 20% from 95. Under 71 it is 1 ÷ (90 − age). There is no minimum in the year the RRIF is opened, and you can use a younger spouse's age to lower it.

How is a RRIF taxed at death?

Unless it passes to a spouse or a dependent child, the whole balance is added to your income in the year of death and taxed at once, often at the top rate. That is the main reason to draw a large RRIF down while you are alive.

Do RRIF withdrawals reduce my OAS?

Yes. They are taxable income and count toward the OAS recovery tax threshold, $95,323 for 2026. TFSA withdrawals do not count. The simulation tracks the clawback under each strategy.

What does 'blended' mean?

Each year you take just enough from the RRIF to fill the lowest federal tax bracket, up to $58,523 of taxable income in 2026. The rest of your spending comes from the TFSA. This turns RRIF money into cash at the lowest rate every year.

Is tax withheld on RRIF withdrawals?

Yes, on amounts above the minimum: 10% up to $5,000, 20% to $15,000 and 30% above that. In Quebec it is 5%, 10% and 15% federal plus 14% provincial. Withholding is a prepayment. The simulation calculates the final tax on your return.

What is an RRSP meltdown?

Taking more than you need from your RRSP or RRIF in the years before CPP and OAS start, when your income is lowest. The money is taxed at a low rate now instead of a high rate later, and the surplus can go into a TFSA. The meltdown strategy here draws the RRIF up to the top of the second federal bracket, $117,045 in 2026, in those years, then switches to the blended order.

How are non-registered investments taxed when I sell them?

Only the gain is taxed, at half your rate. So a withdrawal from an account with a high cost base costs very little tax. The calculator tracks your cost base, taxes only the gain part of each withdrawal, and adds the tax on unrealized gains to the estate figure.

Does the answer depend on how long I live?

Sometimes. The sensitivity line runs the comparison to 85, 90 and 95. If the same order wins at all three, you can act on it. If not, pick the one that does best across the ages you think are likely.