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LIFE INCOME FUND (LIF)

A special gift for the future.

The Life Income Fund (LIF) lets you access your locked-in retirement savings. This unique account sets minimum and maximum withdrawal amounts so that you’ll have retirement income for life.

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What’s a LIF?

Retirement strategy.

A LIF is similar to a Registered Retirement Income Fund (RRIF). Investments held in a pension fund, Locked-in Retirement Account (LIRA) or Locked-in RRSP can be transferred to a LIF. If you’re planning for early retirement or leaving a job where you have a pension, your employer’s pension fund can be transferred directly to a LIF.

Retirement income.

A LIF lets you access your LIRA or Locked-in RRSP savings as retirement income. To ensure that you have retirement income for life, there are yearly minimum and maximum withdrawal amounts.

Tax-sheltered account.

You’ll only be taxed when you withdraw your money. The rest of the funds in the account continue to grow tax-free.

Federal vs. provincial LIFs.

Know your jurisdiction.

LIFs are subject to federal or provincial pension legislation. That means the regulations to convert and receive temporary payments will differ by legislation. For that reason, it's important to know what jurisdiction your plan falls under.

Funding your LIF.

You can transfer savings either directly from a pension fund, or from a LIRA, which falls under provincial jurisdiction, or a Locked-in RRSP, which falls under federal jurisdiction.

Jurisdiction is determined by your employer.

If your employer falls under provincial jurisdiction, your LIF will be provincially legislated. If your employer falls under federal jurisdiction, such as train and air transportation, radio and television, and banks, among others, the LIF will be subject to federal legislation.

Jurisdiction

Investment account type

Capital from pension funds set up by companies under provincial jurisdiction

LIRA, Provincial LIF

Capital from pension funds set up by companies under federal jurisdiction

Locked-in RRSP, Federal LIF

LIF lowdown.

Feature

The details

Converting a LIRA or Locked-in RRSP to a LIF

The conversion must be completed before December 31 in the year you turn 71.

Eligible investments

GIC, term deposit, ActionGIC, mutual funds.

Contributions

You can’t deposit funds into a LIF. You can only transfer funds from a LIRA or Locked-in RRSP, or directly from a pension fund to a LIF.

Minimum withdrawal

• Your minimum withdrawal amount is based on your age, or your spouse’s age, and on your year-end LIF balance. The LIF balance is multiplied by a percentage determined by the government and based on your or your spouse’s age to calculate the minimum amount.

• Your spouse must be younger than you to base the calculation on their age.

• The minimum withdrawal isn’t mandatory during the first year of the LIF. 

• There’s no tax deduction at the source for the minimum amount, but all other income over the minimum amount will be taxed at the time of withdrawal.

Maximum withdrawal

• Federal LIF: Your maximum withdrawal amount is calculated based on age, the LIF balance and the percentage rate determined by the government for the LIF.

• Provincial LIF under Quebec jurisdiction:

• Calculating withdrawals if you’re aged 55 or over: As of January 1, 2025, if you’re 55 years old or more at the time of the application for income, there’s no limit on withdrawals. Amounts held in a LIF offering variable income will no longer be subject to a maximum annual withdrawal amount. In fact, you can withdraw part or all the funds, in one lump sum or over several payments.

• Calculating withdrawals if you’re under age 55: The maximum withdrawal is equal to the maximum between the lifetime income ceiling and the temporary income.

Temporary income

• Federal LIF: Temporary income withdrawals aren’t allowed.

• Provincial LIF under Quebec jurisdiction: As of January 1, 2025, you can withdraw temporary income under certain conditions if you’re under age 55. The withdrawal amount varies depending on your age at the time of the request.

• Note: Temporary income no longer applies if you’re aged 55 or over since there’s no longer a maximum limit for this age group.

Helpful tips and resources.

Your questions answered.

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