What should Rakshana, who just turned 71 , do with her RRSP funds to ensure...

The correct answer is C. Purchase a life annuity . The Investment Funds in Canada course explains that by the end of the year in which an individual turns 71, RRSP funds must be converted to a retirement income option , such as a RRIF or an annuity.

A life annuity provides guaranteed income payments for as long as the annuitant lives , thereby directly addressing Rakshana’s goal of receiving a steady income until death. This eliminates longevity risk—the risk of outliving one’s savings—which is a key concern in retirement planning.

A RRIF (Option A) allows flexibility but does not guarantee lifetime income, as payments depend on account performance and withdrawals. A fixed-term annuity provides income for a specified period only, not for life. A lump-sum withdrawal would trigger immediate taxation and does not provide ongoing income.

The CIFC text emphasizes that annuities are suitable for retirees seeking predictability and security , particularly when income certainty is more important than flexibility. Therefore, Option C is the most appropriate and fully CIFC-aligned answer.