To protect against this, many people choose a joint annuity, which covers both spouses, or an annuity whose payments are guaranteed for a specified number of years. The more guaranteed options you choose, however, the lower your monthly payments will be. A RRIF is similar to a RRSP, except that payments are made to you instead of by you. The Income Tax Act requires that you withdraw a minimum amount from your RRIF every year. The amount is a specified percentage of the value of your plan at the beginning of the year and it increases every year.
All amounts withdrawn are fully taxable.
This is particularly important if you need money for an emergency or if you want to buy a recreational property or take a trip. You control the investments in your portfolio. For example, you may consider equity investing to provide maximum long-term growth and protection against inflation. Should you die before your spouse, he or she can receive payments from your RRIF unless you have designated someone other than your spouse as the beneficiary. Your spouse also has the option of transferring your RRIF into his or her own, or even into an RRSP if under 69 years of age.