A refund of your LIRA or LIF

A refund of your locked-in retirement account (LIRA) or life income fund (LIF) is possible, under certain circumstances.

• If you are age 65 or over 
• If you no longer live in Canada 
• If you are disabled 
• At death 
• Beware of fraudulent withdrawals 

Note that...

---

To obtain a cash payment (refund), an application must be made to the financial institution. All refunds are taxable. However, it is possible to defer taxation if the amounts can be deposited directly in an RRSP or a registered retirement income fund (RRIF).

---

If you are age 65 or over

You can withdraw the entire amount in your LIRA or LIF, on the condition that the total amount accumulated in your retirement savings instruments mentioned below is not more than 40% of the maximum pensionable earnings under the Québec Pension Plan for the year of your application (20 040 $ in 2012).

Savings instruments affected:

• LIRAs
• LIFs
• Defined contribution pension plans or the defined contribution component of a defined benefit pension plan
• Simplified pension plans (SIPPs)
• Locked-in RRSPs

If you no longer live in Canada

You can demand a refund of the balance of your LIRA or LIF in a single payment at any age, if:

• the investments have come to their agreed-upon maturity
  and
• you have not lived in Canada for at least 2 years

Worth knowing about ...

---

If a refund is made before your investments have matured, fees may be charged.

---

If you are disabled

If you have a physical or mental disability that reduces your life expectancy, you are entitled to a refund, in part or in whole, of your LIRA, if you provide a medical certificate to the financial institution. Financial institutions can neither tighten nor loosen those restrictions.

What to do with your LIF

You can obtain a refund if you transfer your LIF to an LIRA before the end of the year you reach age 71. You must meet the conditions noted above.

Information about refunds

• You can arrange with your financial institution to have the refund made in a single payment or several payments.
• The refund must be made regardless of the agreed-upon term of investment. However, penalties may be charged if the investments are withdrawn before maturity.

The disability must reduce your life expectancy

• If your health problems do not affect your ability to work, you cannot be considered disabled.
• The conditions for being deemed disabled may be different from those under the Québec Pension Plan.
• Reduced life expectancy does not necessarily mean that the reduction must be significant.

When you die

At your death, the balance in your LIRA or LIF will be paid to your spouse. If he or she has renounced it or if you have no spouse, the balance will be paid to your heirs. Amounts withdrawn are taxable, unless they can be transferred on a tax-free basis, for example, a direct transfer from your LIRA to your spouse's RRSP.