A RRIF is really a continuation of your RRSP, but with a twist: you can’t make regular contributions to a RRIF – only withdrawals. That’s because the main purpose of a RRIF is to provide a source of ongoing retirement income. Here’s how a RRIF works:

• Transfer assets in. A RRIF can only be funded by a transfer of assets from RRSPs or RRIFs owned by you or a deceased spouse/common-law partner, a registered pension plan or a deferred profit sharing plan. You can’t make contributions to a RRIF (with some rare exceptions).
• Keep savings tax-sheltered. Like an RRSP, a RRIF is a tax-sheltered vehicle in which you make the investment decisions. You have complete flexibility in tailoring an investment strategy to meet your financial needs.
• Make ongoing withdrawals. Each year, you must withdraw a minimum amount from your RRIF. The minimum withdrawal is based on a percentage of your RRIF assets and increases with your age. For example, the minimum RRIF withdrawal rate is 7.38% at the age of 71 (the last year in which you can hold an RRSP) and levels off at 20% at 94 years and over.

Just like withdrawals from an RRSP, all withdrawals from a RRIF are taxable, and there is no maximum withdrawal limit.