RRSP money can be converted tax free into a Registered Retirement Income Fund (RRIF) or an Annuity. Both options are designed to convert your RRSP into an income stream. The RRIF will continue to shelter your investment in the same manner as your RRSP. There is a mandatory minimum amount that must be withdrawn from the RRIF each year and reported for income tax purposes. You have the option of taking out as much of the RRIF as you choose. Any withdrawal will subject to income tax.

Annuities are guaranteed, much like pensions. The amount of income you receive is dependent on interest rates. An annuity is most attractive during times of high interest and less attractive during a low interest rate environment. Annuities require no management and the possibility of a guaranteed income stream is appropriate for those who are risk averse.