The ABCs of LIFs

Important notice - 2021


See our Frequently Asked Questions for details on the temporary easing measure we have implemented regarding LIF withdrawals during the COVID-19 pandemic.

Please note that our LIF Quick Calc tool, which makes it possible to determine the amounts that you can withdraw from an LIF, does not take into account the measure and will not be modified during the outbreak.

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 (pension fund).

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. 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.

    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.

To find out more...

Did you know?

A life income fund (LIF) is payable until death!
LIF Quick Calc - Determining how much you can widthdraw from your LIF in 2020.
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