Converting your RRSP to a RRIF
By December 31 of the year you turn 71, your RRSP must be collapsed. Most Canadians convert it to a Registered Retirement Income Fund (RRIF). The investments stay the same, the wrapper just changes name. Starting the year after you set up the RRIF, you must withdraw a mandatory minimum each year, starting at about 5.28% at age 72 and rising every year (over 8% by age 80, 20% by age 95). Withdrawals are taxed as ordinary income and count toward the OAS clawback.
You enter age 72 with a $700,000 RRIF. The mandatory minimum is roughly 5.28%, that is about $36,960. By age 80, the minimum is about 6.82%, so on the same $700,000 balance, that is roughly $47,740. By age 90, it jumps to 11.92%, that is $83,440. The schedule is designed to wind the RRIF down, fast. Plan your tax brackets accordingly.
Letting the mandatory withdrawal sit in your chequing account uninvested. The minimum is just the forced withdrawal, you do not have to spend it. Move what you do not need straight into your TFSA (if you have room) and it keeps growing tax-free for the rest of your life.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.