In our current tax system, which will be changed by Bill C-52, taxpayers are generally required to convert their RRSPs to RRIFs, registered retirement income funds, and to stop contributing to their RRSPs by the end of the year in which they turn 69. Similarly, registered pension plan payments must generally begin by the end of the year in which the pension plan member turns 69.
As we know, many older Canadians are well and in good health and want to continue working and saving. Under the proposed changes we are increasing the age limit for maturing registered pension plans and RRSPs to 71 from 69. This will increase work and savings incentives for older Canadians, and this will be achieved by permitting additional RRSP contributions and accrual of pension benefits and not requiring any drawdown of tax-deferred savings at ages 70 and 71.