The ABCs of LIFs
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 
. 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.
You can begin
drawing a life income at any age. Some conditions apply with regard to a temporary income.
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.
- You can also
transfer an amount from your
LIF to an
RRSP or RRIF.
Consult the
list of financial institutions offering
LIRAs or
LIFs to find out what transfer instruments are available.
Other useful information