Catholic Mission In Canada

RRIF benefits

• Flexibility: Like your RRSPs, you continue to choose how your funds are invested
  
  
• Funds remain tax-sheltered
  
  
• You can withdraw more than the minimum amount if you need

RRIF disadvantages

• All withdrawals are fully taxable
  
  
• No charitable receipt
  
  
• Minimum amount must be withdrawn annually creating a possible clawback on your Old Age Security pension
  
  
• You have to continually monitor your investment. Investments are subject to the volatility of the markets
  
  
• If you die prematurely, your funds will flow into your estate and be fully taxable

Commercial annuity benefits

• Guaranteed fixed payments
  
  
• Term certain (3-30 years) or life annuity
  
  
• Safe from ups and downs of market

Commercial annuity disadvantages

• All payments are fully taxable
  
  
• A life annuity ceases at death. There is no residual for your estate
  
  
• Commission and management costs; possible penalties for early withdrawals
  
  
• Possible clawback on your Old Age Security pension
  
  
• No charitable receipt. If you die before or after your chosen term period, your annuity ceases. If you die within your term period, your remaining funds go to your beneficiary.