The ABCs of LIFs

Update to come

This page will be edited at a later date to take into account the Regulation to amend the Regulation respecting supplemental pension plans, which comes into force on 1 January 2025.

A life income fund (LIF) is a specific type of registered retirement income fund (RRIF) from which you can draw a retirement income (payment). The amounts in an LIF originate from a supplemental pension plan or the locked-in account of a voluntary retirement savings plan (VRSP).

Unlike an RRIF, which has no withdrawal ceiling, you cannot withdraw from an LIF more than the maximum authorized for the year.

Like an RRIF, you must withdraw the minimum required under tax rules. The minimum withdrawal from an LIF is equal to the minimal withdrawal from an RRIF prescribed under taxation rules This link will open in a new window.. You are not required to make a withdrawal during the year in which the LIF is opened.

Types of income from your LIF

You can draw a life income from your LIF. In addition, it is possible to draw a temporary income from your LIF, if this option is provided for in your LIF contract.

Under certain circumstances, you can obtain a refund of your LIF.

Transferring your LIF

  • You can transfer your LIF to an LIRA at any time until the end of the year in which you reach age 71, for example, if you wish to postpone payment of a retirement income. However, the transfer could be delayed if your investments have not come to maturity on the date you request the transfer.
  • You can also transfer your LIF to another LIF during the year, for example, if you change financial institutions. However, the transfer could be delayed if your investments have not come to maturity on the date you request the transfer.

    Important

    The amounts transferred from your first LIF cannot be used to provide you with a life income until the beginning of the following year. Be sure to withdraw all the amounts you want for the rest of the year before making the transfer.

    The same rule applies to payment of a temporary income, unless you are under age 54 and still meet the conditions for entitlement to a temporary income. If you meet those conditions, an amount can be paid to you, even if your LIF was transferred during the same year.

Consult the list of financial institutions offering LIRAs or LIFs to find out what transfer instruments are available.

Other useful information

LIF Quick Calc - Determining how much you can widthdraw from your LIF in 2020.
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