The ABCs of
LIRAs
A locked-in retirement account (LIRA) is a specific type of registered retirement savings plan (RRSP) that functions as a savings instrument for retirement. The amounts in an
LIRA originate from a supplemental pension plan or the locked-in account of a voluntary retirement savings plan (VRSP).
Unlike an
RRSP...
The funds in an
LIRA are locked-in and can only be used to provide a retirement income. Thus, the amounts cannot be withdrawn, except under certain circumstances in which a refund from your
LIRA is permitted.
Like an
RRSP...
You can hold an
LIRA until 31 December of the year in which you reach age 71. Before that date, you can transfer your
LIRA to another
LIRA, for example, if you change financial institutions. You can also transfer your life income fund (LIF) to an
LIRA, in particular when you want to postpone payment of a retirement income.
Consult the list of financial institutions offering
LIRAs or
LIFs to find out what transfer instruments are available.
If you wish to receive a retirement income
Your
LIRA cannot be used to pay you a retirement income. To receive an income, you must transfer your LIRA:
either to an
LIF;
or
- to an insurer for the purchase of a life annuity.
There is no minimum age to make this type of transfer. However, the transfer could be delayed if your investments have not come to maturity at the date you request it. You must make the transfer before the end of the year in which you reach age 71, regardless of when your investments mature.
Other useful information