LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A Registered Retirement Income Fund (RRIF):
- Receives RRSP assets and requires taxable minimum withdrawals that rise with age
- BIs tax-free, since the money was taxed when it was earned before being contributed to the RRSP
- CAccepts new contributions, so a retiree with earned income can keep adding to the plan
- DPays a guaranteed income for life, since the government sets the withdrawal schedule
Correct answer: A) Receives RRSP assets and requires taxable minimum withdrawals that rise with age
The RRIF is the flexible RRSP maturity option. Minimums are based on age (or a younger spouse's age); withdrawals are taxable.
Why the other options are wrong
- BWithdrawals are taxable as income.
- CRRIFs do not accept contributions, only transfers.
- DA life annuity guarantees lifetime income; a RRIF can be exhausted.
Exam tip
RRIF: minimum withdrawals by age, no maximum, taxable, can run out.
Common mistake
Telling a client a RRIF guarantees income for life.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
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