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LIF
Life Income Fund (LIF): Access Your LIRA or Pension for Retirement
A Life Income Fund (LIF) is a type of Registered Retirement Income Fund (RRIF) that allows you to withdraw income during retirement while your investments continue to grow. It’s designed to convert a locked-in retirement account, such as a LIRA or pension, into income once you’re ready to retire, typically by the year you turn 71.
Why Set Up a LIF?
A LIF offers a flexible, sustainable income plan tailored to your retirement needs.
Consistent Retirement Income: Withdrawals can be made within an annual range (based on age and province), ensuring you have a reliable income stream throughout retirement.
Investment Flexibility: Unlike annuities, a LIF allows you to choose investments based on your financial situation, including the option to invest in international securities.
No Age Restrictions: You can begin receiving income from your LIF at any time, even before 65. For those under 65, you may also qualify for supplemental or temporary income.
How a LIF Works:
Create a Strategy: If you have a LIRA or pension and are approaching retirement (or turning 71), it’s time to consult with one of our advisors to develop a personalized strategy. Together, we’ll assess your time frame, financial needs, and risk tolerance to design a tailored plan.
Adjust Your Investments: Even though you can’t contribute additional funds to your LIF, you can adjust your investments to fit your evolving needs. Your funds will continue to grow tax-deferred until you make a withdrawal.
Withdraw Within Legal Limits: Your retirement strategy will guide your income withdrawals. However, the amount you can take each year is regulated by law and must fall within the minimum and maximum limits, depending on your age and province. Withdrawals are subject to tax at the time of distribution.
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What is the difference between a LIF and a regular RRIF?
A LIF is specifically for locked-in retirement funds like a LIRA or pension plan, while a regular RRIF can be set up with other types of retirement savings. LIF withdrawals are regulated by law and vary depending on age and province.
Can I change my investment strategy after setting up my LIF?
Yes, even though you cannot add additional funds to your LIF, you can still adjust your investment portfolio based on your changing needs and preferences.
How much can I withdraw from my LIF each year?
The amount you can withdraw is based on a minimum and maximum limit set by the government, which depends on your age and province of residence. Withdrawals are subject to tax.