Which statement is true about RRIFs?

The correct answer emphasizes that a minimum annual amount must be withdrawn from a Registered Retirement Income Fund (RRIF). This is a key feature of RRIFs, as they are designed to provide income during retirement. When an individual transitions from a Registered Retirement Savings Plan (RRSP) to a RRIF, they must begin withdrawing a specified minimum amount each year, which is calculated based on their age and the balance in the RRIF at the beginning of the year. This rule ensures that RRIF funds are used for their intended purpose—providing retirement income—rather than being left untouched.

In contrast, the other options suggest conditions that do not accurately describe the function or the rules governing RRIFs. For example, while it is true that there are specific rules for RRIFs, they are not less strict regarding withdrawals than those for RRSPs; therefore, this aspect does not hold. Additionally, a RRIF holder is not required to be at least 71 years old to open a RRIF; they can set one up earlier if they withdraw funds from an RRSP at that time. Lastly, although there is a minimum withdrawal requirement, there are no restrictions on maximum withdrawal amounts, allowing individuals the flexibility to withdraw more than the minimum