Janine will celebrate her 71st birthday this year. She currently has a lot of money in a personal registered retirement savings plan (RRSP) and knows there are rules about what she can do with those funds. Which of the following is TRUE?

By the end of the year an individual turns 71, they must terminate their Registered Retirement Savings Plan (RRSP). One of the three available options is to use the RRSP funds to purchase an annuity. This can be a life annuity, which provides payments for life, or a term annuity, which provides payments for a specified period. The other two options are to withdraw the entire amount in cash (which becomes fully taxable income) or to convert the RRSP into a Registered Retirement Income Fund (RRIF).

A. An LRIF is a retirement income vehicle for locked-in pension funds, not for funds from a personal RRSP.
B. The RRSP must be converted by December 31st of the year she turns 71, not by the end of the next year.
C. The entire amount can be taken in cash, but it is fully taxable as income in the year of withdrawal.

1. IFSE Institute, Canadian Investment Funds Course (CIFC), Chapter 10: Retirement Plans and Products, Section: "Maturity Options for an RRSP," pp. 10-12, 10-13.

2. Canada Revenue Agency. (2023). T4040 RRSPs and Other Registered Plans for Retirement. Section: "Maturing your RRSP."