Customer Comments: Mandatory RRIF Withdrawals

Editor’s Note: this is a letter we received in late February from a CARP member – we believe it is an articulate and evocative letter that lays out a problem we’ve heard members complain about time and time again.  This particular member had not heard of CARP considerable body of work on the RRIFs file.  CARP lead a successful campaign against mandatory RRIF withdrawals culminating in the 2008 – 2009 reduction of 25%.  We continue to fight against a government imposition that forces seniors to withdraw from their own savings in a way that could compromise their retirement security.


I am 74 years old, a widow with no children. My husband and I worked hard and saved well for our retirement years. Last year I was forced by law to withdraw from my RIFs, taking the minimum. I did not need this income and, in fact, the withdrawals put me into another tax bracket. The upshot was a whallop in income tax and a clawback of half my OAS. This penalty in addition to decreasing the capital of the RIFs has me very concerned.

When the time comes for me to leave my home, my plan was to go into a retirement home at my expense. Having the amount in my RIFs depleted by tax and by capital reduction, I’ll likely end up in a long-term care facility at the expense of the state.

We hear a lot about enabling seniors to remain in their homes, and we hear a lot about protecting the pensions of seniors. The regulation regarding the mandatory withdrawal from a RIF at 72 flies in the face of these two goals. Optional withdrawal would enable people who need the funds to access them and enable people who do not to retain their savings for use when they really do need the funds to provide the kind of elderly accommodation anticipated in their planning. In addition, when we can pay for our own elderly care, there is less cost to the government which is already exercised over the scarcity of care facilities available for seniors and how to fund senior care.

I should think that CARP would gain the favour of many of its senior members if CARP would lobby the government to repeal the mandatory withdrawal of RIF funds at 72. I urge you to take up this task and help us retain our lifestyles with dignity, free from the fear and worry of running out of funds in our elder years with no one to support us except the government.

Thank you for considering this important issue.