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Life Income Fund (LIF)

Life Income Fund (LIF): A tax-sheltered Retirement Income plan with legislated minimum and maximum annual withdrawal amounts. Funds originate from locked-in funds under a registered Pension Plan or a Locked-in RRSP/LIRA. In most provincial jurisdictions a LIF must be converted to an annuity at age 80.

 

Life Income Fund (LIF)

  • Provides income from money originally in an employer pension plan
  • You decide how money is invested
  • Like a RRIF, government determines minimum income payments

 

If you leave a job where you had a Pension Plan, you usually have a choice between leaving the pension money in the Pension Plan or transferring it to a Locked-in Retirement Account (LIRA) or locked-in RRSP, where it can be invested according to your directions until it is time to retire. Typically, the money is locked-in and cannot be withdrawn until you start Retirement.

 

After a minimum age (set by your province) you can start to receive income from this pension money by converting it into a LIF. The LIF pays you an income. There is a maximum you can withdraw each year, which is intended to ensure that your money will last long enough to help support you in your retirement.

 

  • You can hold many types of investments in LIFs, such as GICs, mutual funds, or Segregated Funds. You decide where to invest and can perform transactions within the plan.
  • You have some control over how much tax is withheld from the payments.
  • You can name a beneficiary to receive your money after you die.
  • There is a minimum income you are required to take out of the plan every year and a maximum you are allowed to take from your plan.
  • You can use money remaining money in a LIF to purchase a secure guaranteed income in a life Annuity. Depending on the pension rules in your province, you may be required to do this at a certain age.
  • LIFs are available across the country.

Contact Stewart Financial Services for more information about LIFs and other Registered Investment opportunities to meet your current and future needs and lifestyle.