^InsightsRRIF Withdrawal Rules May Change—What Retirees Should Consider Before Acting

Following the federal election outcome, the re-elected Liberal government has reaffirmed its proposal to reduce the mandatory minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for one year. While official details remain pending, this temporary relief—if enacted—could offer retirees added flexibility during uncertain market conditions.

The stated goal of the proposal is to help seniors avoid liquidating retirement assets during downturns simply to meet withdrawal requirements. However, no legislation has been passed, and the government has yet to clarify the specifics.

“We don’t know how this will be administered,” said Jamie Golombek, Managing Director of Tax and Estate Planning at CIBC Private Wealth. “We assume this proposal will be for the 2025 tax year… although we have not seen any clarification on that to date.”

For retirees who don’t rely on RRIF withdrawals to meet immediate expenses, the question becomes: should I wait?

There’s precedent on both sides. In 2020, RRIF minimums were reduced by 25%, but recontributions of amounts already withdrawn were not allowed. In contrast, the 2015 federal budget introduced a similar reduction—along with the option to recontribute the excess. The global financial crisis in 2008 saw yet another variation, with recontributions permitted after the fact.

“If clients don’t need the cash flow from the RRIF today… that might be the thing to do,” said Wilmot George, Managing Director at Canada Life. “You can react to whatever the details are, as opposed to acting in advance and then being stuck.”

With a federal budget expected soon—potentially between May 26 and June 20—we expect more clarity in the coming weeks. Until then, our advice is straightforward: if you have the flexibility, consider pausing any unnecessary RRIF withdrawals. Acting early could limit your ability to benefit from future changes.

In addition, the Liberals have proposed a one-time 5% increase to the Guaranteed Income Supplement (GIS) for low-income seniors—potentially offering up to $652 in tax-free support.

Final Thoughts

While the government’s proposed reduction in RRIF minimum withdrawals offers potential relief for retirees, the lack of clarity means it’s worth exercising caution before making any changes. If you don’t need your RRIF withdrawals immediately, waiting for the federal budget announcement may give you greater flexibility—especially if recontributions are permitted.

As always, we’re here to help you navigate the evolving retirement landscape.

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