The Securities and Investment Management Association is urging Ottawa to delay RRSP conversion and ease RRIF rules amid rising costs for seniors
The Securities and Investment Management Association (SIMA) is advocating for changes to Canada’s retirement savings framework.
It is focusing on two proposals that it says would offer seniors greater financial flexibility amid rising living costs and longer lifespans.
SIMA is calling for the elimination of mandatory withdrawals for retirees with $200,000 or less in their registered retirement income funds (RRIFs).
It also supports raising the age at which Canadians must convert their registered retirement savings plans (RRSPs) into RRIFs—from 71 to 73—to allow for more time to grow retirement savings.
“Canada's retirement savings policies are outdated and do not address today's financial realities,” said Andy Mitchell, president and CEO of SIMA.
“In this challenging economic environment, the federal government should offer seniors more financial flexibility so they can maximize their saving potential.”
According to SIMA, current rules force RRIF withdrawals the year after the account is opened—even when the funds are not needed.
These withdrawals can lead to unnecessary taxation and accelerate the depletion of retirement savings.
Around 75 percent of RRIF holders have balances of $200,000 or less, a group SIMA says would benefit most from having the option to delay or avoid forced withdrawals.
“Canadians should not be forced to withdraw their savings at a pace that does not reflect their needs or market conditions,” Mitchell said.
He added that eliminating the mandatory RRIF withdrawals for smaller balances would allow retirees to better manage market volatility, avoid selling investments in downturns, and ensure their savings last longer.
SIMA also emphasized that more Canadians are working into their late 60s and 70s, underscoring the need to modernize retirement policies.
The association said both proposals would help seniors align their savings strategies with longer life expectancies and today’s financial pressures, including inflation, tariffs, and rising healthcare costs.
Mitchell urged all federal parties to consider the recommended reforms as practical and targeted ways to improve financial outcomes for seniors.
| The Securities and Investment Management Association represents Canada's investment industry and champions its interests. Formerly known as the Investment Funds Institute of Canada (IFIC), the association now leads the securities and investment management sector, which manages about $4tn in assets on behalf of more than 20 million investors and the Canadian capital markets. |
