Registered Retirement Income Fund - RRIF

Canada seems normal(ish), but they do things a little differently. They put gravy and cheese curds on fries. They watch curling on TV. They apologize when they do something wrong. All stuff you don't do in the good ol' U.S. of A.

They also have a two-step retirement system. In the U.S., the government provides tax incentives to invest through an IRA. You put money into the IRA. Then, come retirement time, you take money out of the IRA. Money goes in...money comes out. One account.

In Canada, there are two types of accounts. There is the Registered Retirement Savings Plan, or RRSP. It works much like an IRA in the States: Canadians get tax breaks to put money into the account, in order to save for retirement. At age 71, Canadians have to withdraw money from the RRSP. Or they can covert it into a Registered Retirement Income Fund (RRIF). It's like a holding pen for the RRSP money. You can't contribute any additional money to the RRIF; whatever you rolled over from the RRSP is what you get. But the funds can continue to grow there with the same tax advantages.

So the RRSP is the savings part, and the RRIF is the distribution part.