The latest age to convert a Registered Retirement Savings Plan (RRSP) to a Registered Retirement Income Fund (RRIF) is 71, but you may want to open a RRIF at 65.

You can take advantage of a strategy that saves you tax each year from ages 65 through 71. It’s based on the federal pension income tax credit, which allows you to claim 15% on $2,000 of eligible pension income. A provincial pension income tax credit is also available (except in Quebec), with the percentage varying by province.

Here’s how it works. At age 65, you open a RRIF and transfer $14,000 from your RRSP to your RRIF, still invested in mutual funds. From ages 65 to 71, you withdraw $2,000 annually from your RRIF, claiming the pension income credit each year. If you don’t need the $2,000 RRIF withdrawals as income, you could invest the money in mutual funds in your Tax-Free Savings Account (TFSA) or a non-registered account.

From age 72 onward, you can continue to claim the annual tax credit on the first $2,000 of your RRIF withdrawals.