You must windup your RRSP by the end of the year in which you turn 71. A straight withdrawal is usually not the best option, since the money will be taxed like any other income, and may push you into a higher tax bracket for the year. You should instead consider transferring the RRSP funds to a Registered Retirement Income Fund (RRIF), or an annuity, which will be paid to you over time.
Even though you cannot put money into your own RRSP after the year you turn 71, you can still contribute to a spousal RRSP until the end of the year your spouse turns 71. However, to do so, you will have to have unused RRSP deduction room, or have current earned income. By the end of the year your spouse turns 71, he or she will also have to move the funds from his or her RRSP.
If you are between the ages of 69 and 71 this year, you may have already converted your RRSP to a RRIF or annuity based on the previous age limit of 69. See your RRSP issuer or a Chartered Accountants for advice about the options available to you in light of the new higher age limit.
Information for RRSP Tips is provided as a public service by the Chartered Accountants
of British Columbia.