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By Allan Norman, MSc, CFP, CIM on April 22, 2025
Estimated reading time: 5 minutes

By Allan Norman, MSc, CFP, CIM on April 22, 2025
Estimated reading time: 5 minutes

Yes, your estate will pay a high rate of tax on your RRIF when you die. But it usually pays to keep the account intact and benefit from tax-free compounding if you can.

Is it a good idea to withdraw more money monthly than one needs from one’s RRIF? What about beginning a regularly automated transfer of this extra money to one’s non-registered investments so that there is less money in the RRIF account upon death? As a result, the estate will be taxed less (by slowly moving it from the RRIF to the non-registered investments as one ages), instead of the RRIF portion of the estate being taxed at 50% upon death. Note that this person has contributed the maximum yearly amount into their TFSA so there is no room left there.

—Andrea

Hey Andrea, this is a good question. In most cases I would say no. It’s not a good idea to draw extra money from your registered retirement income fund (RRIF) and invest it in a non-registered account just to pay less tax in your estate, unless your goal is to pay less tax. That may sound like a contradiction, but I’ll explain that.

Before I give you my thoughts, I have to ask: What is your real goal? Is it to have your estate pay less tax, or is it to maximize the........

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