Life income fund (LIF)

Ensuring income in retirement

  • Annual retirement income
  • Periodic withdrawals as needed (subject to legal minimum and maximum amounts)
  • Lump-sum withdrawals (subject to annual maximum)

Key features

  • LIFs are the extension of LIRAs or locked-in RSPs.
  • Income from LIFs is eligible for both federal and provincial pension income tax credits, subject to certain conditions.
  • There is no minimum age for converting your LIRA or locked-in RSP to a LIF.
  • Funds in LIFs cannot be seized.
  • A portion of the funds in federal and Ontario LIFs can be unlocked, subject to legal conditions and limits.
  • You can transfer all or a portion of your LIRA or locked-in RSP to a LIF no later than December 31 of the year you turn 71.
  • Investments grow tax-sheltered until you withdraw them.
  • At death, a LIF balance is transferred to your surviving spouse or, in certain conditions, to your estate.
  • LIFs can be converted to annuities in whole or in part at any time.
  • Funds you receive from a LIF are part of your annual income.