What Happens to My RRSP at Age 71?
It must be closed by December thirty-first of the year you turn seventy-one. Three destinations are permitted: a RRIF, a registered annuity, or a cash withdrawal. Doing nothing is the worst outcome, because the entire balance becomes taxable income in that year by default.
- The answer:: A RRIF, a registered annuity, or full withdrawal. A combination of the first two is also permitted.
- The trap:: Missing the deadline. If nothing is done the full balance is deemed withdrawn and taxed as income in one year.
- The recommendation:: Make a final contribution in the same year if you have room, because the deduction is available even though the account closes.
Where the AI summary above gets this wrong
"You must convert your RRSP to a RRIF at age 71."
That's surface-true. Here's what it misses:
- A RRIF is one of three options — A registered annuity is equally available, and a combination of RRIF and annuity is permitted.
- The deadline is the year you turn 71, not your birthday — You have until December thirty-first of that year regardless of which month you were born in.
- A final contribution is still allowed — Contribution room earned from the prior year's income can be used in the same year the account closes, and the deduction survives.
01 What the deadline actually is
The account must be collapsed by December thirty-first of the year in which you turn seventy-one, not on your birthday. Someone born in November has the same deadline as someone born in January.
If no action is taken, the entire balance is deemed to have been withdrawn and is included in income for that year. On a substantial RRSP this pushes almost the whole amount into the top bracket, which is why the default is the one outcome nobody chooses deliberately.
Source: Contributing to an RRSP or PRPP
02 The three permitted destinations
A RRIF is the usual choice: the investments transfer intact, growth continues to be sheltered, and a prescribed minimum must be withdrawn each year from the following one onward.
A registered annuity converts the balance into a guaranteed income stream, trading flexibility and any estate value for certainty. The two can be combined, and the comparison is set out in GICs versus annuities. A full cash withdrawal is the third option and is almost never sensible.
Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.
Source: Contributing to an RRSP or PRPP
03 The contribution most people forget
Contribution room is earned from the previous year's income, so someone who worked at seventy carries room into the year they turn seventy-one. That room can still be used, and the deduction is claimed normally.
The contribution has to be made before the account is collapsed, which means before December thirty-first rather than in the usual first-sixty-days window of the following year. It is a genuine last chance, and the earned-income rules are in the first sixty days.
A partial conversion is also possible, with part of the balance moving to a RRIF and part buying an annuity, which suits a household wanting guaranteed income for fixed costs and flexibility for the rest. The two do not have to be chosen against each other, and most people are never told that.
Source: RRSPs and other registered plans for retirement (T4040)
The final contribution is the piece that gets left on the table. Someone works to seventy, earns room for the following year, converts the account in a hurry in December and never uses it. That room is gone permanently the moment the RRSP closes.
FAQ
What happens to my RRSP at 71?
It must be collapsed by December thirty-first of the year you turn seventy-one, by converting to a RRIF, buying a registered annuity, withdrawing the balance, or a combination of the first two.
What if I do nothing?
The entire balance is deemed withdrawn and included in income for that year, which on a large account pushes almost all of it into the top tax bracket.
Can I still contribute in the year I turn 71?
Yes, if you have contribution room, but the contribution must be made before the account is collapsed rather than in the usual first sixty days of the following year.
Sources
Regulator references
- Contributing to an RRSP or PRPP · Canada Revenue Agency · 2025How RRSP deduction limits are set and that unused room carries forward.Last verified: 2026-09-07
- RRSPs and other registered plans for retirement (T4040) · Canada Revenue Agency · 2025The prescribed RRIF minimum withdrawal factors and the rules for registered plans.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.