Managing retirement income

During retirement, RRSP income can complement government or private plan income. Retirement income will depend on the amount of capital, withdrawals and tax.

The table below shows how some decisions regarding the use of RRSP savings can impact retirement income, the tax bill and the possibility of bequeathing capital. Note that an RRSP must be converted into a Registered Retirement Income Fund or life annuity no later than December 31 of the year in which the holder reaches 71 years of age. Conversion may occur before the age of 71, as necessary.



The importance of setting priorities

The way in which retirement income is managed depends on an individual's priorities, lifestyle, commitments, retirement plans and other sources of available income. If necessary, investing in various types of financial vehicles is possible, to take into account the importance of:

• Growing capital	• Protecting capital
• Planning income	• Reducing or deferring tax
• Accessing capital at any time	• Bequeathing capital

As indicated in the table below, some financial vehicles are best suited to particular financial priorities. While the examples provided in the table do not cover all available retirement income management possibilities, they do illustrate that several possibilities can be considered, and often combined, to optimize income management based on each person's retirement priorities.

	Personal financial priorities
	Growing capital	Protecting capital	Planning income	Reducing or deferring tax	Accessing capital at any time	Bequeathing capital
Type of financial vehicle
Investment fund portfolio	X				X	X
Market linked guaranteed investment (with income on maturity)	X	X		X		X
Market linked guaranteed investment (with periodic income)		X	X	X		X
Term investment with periodic income		X	X			X
Investment portfolio – T class units			X	X	X	X
Life annuity			X	X

Your investment advisor or financial planner can give advice specifically tailored to your situation.