Canada Proposes 'RRSP for Life' Plan to Let Seniors Keep Retirement Savings Past Age 71
A new Canadian federal budget proposal would allow seniors to keep their Registered Retirement Savings Plans after age 71, eliminating the mandatory conversion to a Registered Retirement Income Fund. A public consultation on the plan runs until January 8, 2027.
The Canadian federal budget has introduced a proposal dubbed the "RRSP for life" plan, which would allow Canadians to keep their Registered Retirement Savings Plans (RRSPs) after reaching age 71. Under current rules, account holders are required to convert their RRSPs into a Registered Retirement Income Fund (RRIF) at that age. 
According to Jamie Golombek of CIBC Private Wealth Management, most 71-year-olds currently choose to convert their RRSPs to RRIFs to avoid the taxes associated with cashing out the accounts entirely. The proposed changes aim to simplify financial planning and reduce administrative complexity for hundreds of thousands of seniors annually.
Under the plan, RRSP holders would be required to withdraw a minimum percentage of their savings each year starting at age 72. These withdrawal percentages would be based on average life expectancy. However, mandatory withdrawals may trigger higher levels of taxation for some RRSP holders. John Fragos, press secretary to Finance Minister François-Philippe Champagne, confirmed that under the government's proposal, RRSP account holders cannot contribute to their plans after age 71.
For the 2026 tax year, individuals can contribute up to 18 per cent of their earned income in 2025 to an RRSP, up to a maximum of $33,810.
The proposal also introduces changes for surviving spouses or partners, allowing them to become successor holders of an RRSP. This would simplify tax-free transfers after the account holder's death without requiring the closure of accounts. 
While experts cite administrative simplification as a benefit, others argue the proposal ignores broader issues facing older Canadians. Li Zhang, director of social impact at Chartered Professional Accountants of Canada, estimates that only 33 to 37 per cent of Canadians actually have access to a pension. Critics contend that the plan does not address rising living costs or the lack of retirement savings for the majority of seniors who do not have pensions.
A public consultation on the "RRSP for life" plan started on Thursday and will run until Jan. 8, 2027.