LIRA or LIF – Locked-in Retirement Accounts and Life Income Funds – Ottawa, Ontario
Locked-In Retirement Account (LIRA)
LIRAs are designed to hold retirement funds for former pension plan holders. All contributions and interest earned must remain in the account until a specified age or the individual’s retirement. Funds will be cashed out or converted to Life Income Funds (LIF) upon retirement.
The growth portion in a LIRA is tax deferred until it is cashed out.
Life Income Fund (LIF)
LIFS are registered retirement income funds which are used to hold pension funds and to pay out a retirement income. LIFs may not be withdrawn in a lump sum, but will be paid out to the individual in specified portions. Each year, the minimum and maximum withdrawal amounts will be established in accordance with the Income Tax Act.