LIRA

•  A registered account, similar to an RRSP

• Funded by a company pension plan (Defined Contribution or Defined Benefit)

• Intended to generate income in retirement, much like a pension

• Can be invested like other accounts (RRSP, TFSA, etc.): high-interest savings, stocks, bonds, mutual funds, ETFs

• Governed by either provincial or federal legislation

• Your money is locked in

• Withdrawals are restricted—you can’t redeem funds for most reasons

• Once converted to a LIF (Life Income Fund), a minimum withdrawal is required (similar to a RRSP converted to a  RRIF)

• A maximum annual withdrawal also applies—this is the key difference from a RRIF

• See the chart below for LIRA details by province

Early access to a LIRA is limited, but may be allowed under specific circumstances:

• • Reduced life expectancy

  • Non-residency status (must be a non-resident of Canada for tax purposes)

  • Small balance exemption (if the LIRA value falls below a legislated threshold)

  • Financial hardship (criteria vary by province or federal jurisdiction)

• At retirement, your LIRA must be converted to a LIF (Life Income Fund) or life annuity to begin withdrawals.

• Some provinces allow you to unlock a portion of your LIRA, in simple terms this means you can transfer a percentage to an RRSP.

• See below for a breakdown of which provinces allow unlocking.

• If unlocking is available, we typically recommend unlocking the maximum amount allowed by your plan and legislation.

• Unlock as much as possible (if permitted) to transfer funds into an RRSP, where you have more control and flexibility.

• Prioritize maximum withdrawals from your LIF once in retirement, when it fits within your overall income and tax strategy. This is often the first account to draw from aggressively.

• Consider converting to a LIF before retirement if it won’t push you into a higher tax bracket.

• Ask yourself: Will your income in retirement be equal to or higher than it is today? If so, drawing from your LIRA earlier can help reduce long-term tax exposure and improve estate outcomes.