Your RRSP stays open and keeps growing tax-deferred when you move abroad. But withdrawals are taxed very differently as a non-resident — and converting to a RRIF before you go is one of the most valuable moves you can make. Here's exactly how it works in 2026.
We had meaningful RRSP balances when we started planning our move, and the question of what to do with them felt complicated. The short answer turned out to be simple: convert to a RRIF before leaving, set up periodic payments, and let the 15% treaty withholding rate apply. The alternative — withdrawing as lump sums from an RRSP at 25% — would have cost us significantly more over time. This is exactly the kind of decision where a cross-border CPA earns their fee in one conversation.
The RRSP and RRIF are related but distinct — and they're treated very differently once you're a non-resident. Understanding the difference is the foundation of smart planning.
The difference between a lump-sum RRSP withdrawal and periodic RRIF payments is one of the most significant financial planning decisions for Canadian retirees abroad. The table below shows exactly what Canada withholds in each scenario.
✓ The single most valuable pre-departure move: Converting your RRSP to a RRIF and setting up periodic payments before you leave — or doing so promptly after — reduces your withholding from 25% to 15% in treaty countries on every dollar you draw down. On a $400,000 RRIF drawn over 20 years, that 10-percentage-point difference equals $40,000 in additional net income.
Once you have a RRIF, the CRA requires you to withdraw a minimum amount each year based on your age. The percentage applies to the market value of your RRIF on January 1 of that year. You can always withdraw more than the minimum — there's no maximum — but you must withdraw at least the minimum by December 31 each year.
As a non-resident, Canada withholds on all RRIF withdrawals — unlike the resident rule where the minimum withdrawal has no withholding. Plan your cash flow accordingly: the net amount you receive is the gross withdrawal minus 15% (treaty) or 25% (no treaty).
💡 The younger spouse election: You can base your RRIF minimum withdrawal on your spouse's age rather than your own — if your spouse is younger, this reduces the required minimum each year. Once chosen, you cannot switch back. This is worth considering if your spouse is meaningfully younger and you want to preserve the RRIF balance longer. The election is made when you set up the RRIF.
Take a couple moving to Portugal (treaty country, 15% RRIF rate) with a combined RRSP balance of $500,000. They need to draw $30,000/year from their registered accounts to supplement CPP and OAS. Here's the difference between leaving it as an RRSP vs converting to a RRIF.
Converting to RRIF saves $60,000 over 20 years on a $500,000 balance drawing $30,000/year — before accounting for the compounding growth on the additional $3,000/year you keep.
⚠️ Don't collapse your RRSP as a non-resident without planning. Some Canadians abroad, wanting to simplify their finances, collapse their RRSP entirely — triggering the full 25% on the entire balance in one year, with no treaty reduction available. On a $300,000 RRSP, that's $75,000 withheld immediately. Converting to a RRIF and drawing it down gradually over decades is almost always significantly more efficient.
💡 What happens to your RRIF when you die abroad? Your RRIF can be left to your spouse as a named beneficiary — they receive it as a rollover with no immediate tax. If left to a non-spouse beneficiary, the full fair market value of the RRIF is included in your income in the year of death and taxed accordingly. Canadian estate tax rules apply regardless of where you live. Update your RRIF beneficiary designations before leaving, and include your registered accounts in your estate planning conversation with a Canadian lawyer.
We converted both our RRSPs to RRIFs the year before we made the full move — while we were still Canadian residents. We set up annual periodic payments just above the minimum withdrawal amount to match our projected income needs. Filed Form NR5 within the first few months of arriving in Malaysia. We now receive our RRIF payments at 15% withholding — the Canada-Malaysia treaty rate — directly deposited to our Canadian account monthly.
The decision to convert before leaving rather than after was deliberate: it meant there was no period where we had RRSP balances and needed to make large lump-sum withdrawals. Every dollar we draw goes through the RRIF at 15%, not the RRSP at 25%. Over a 25-year retirement, we estimate the difference at well over $60,000 in our favour.
The complete financial picture
CPP, OAS, TFSA, departure tax, non-residency, provincial health — everything in one place.
Read the Canadian Guide →Sources & Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. RRIF minimum withdrawal rates from TD Canada Trust 2026 schedule, CRA prescribed factors, Questrade 2026, Financialtools.ca June 2026, LifeMoney.ca May 2026. Withholding rates from CRA T4061 Non-Resident Withholding, WatterCPA 2026, Taxoria CrossBorder, Cardinal Point Wealth Management, Greenback Tax Services April 2026. RRIF rates for non-residents from Wealthsimple, CATaxTools July 2026. Tax rules change — always verify current information at canada.ca and consult a cross-border CPA for your specific situation.