Stewart Financial Services

Locked-in Retirement Account (LIRA)

A Locked-in Retirement Account (LIRA) is a RRSP containing funds which originate from a pension plan of an eligible jurisdiction. It is regulated by the Income Tax Act and governed by federal or provincial pension benefits legislation.

 

What are the advantages?

• The interest accumulates tax free until funds are paid out.
• The plan holder retains flexibility to decide when he/she would like to convert the LIRA to a retirement income option such as a LIF (Life Income Fund), as early as the age of 55 years old.
• The decision to transfer your LIRA will depend on many factors in your personal situation such as your age, your need for regular retirement income or for payment flexibility, your concern about inflation and your ability and interest-level in managing your own investments.
• Since you can decide on the type of investment yourself, it is possible to achieve higher rates of return.

Restrictions

 

Transfers to a LIRA can only be made with funds from which the original source is a pension plan from an eligible pension jurisdiction.

 

Who can hold a LIRA?

 

Members leaving an employer prior to retirement with eligible pension savings can transfer the pension savings to a LIRA

 

Locked-in RRSP/Locked-in Retirement Account (LIRA): These are two different terms to describe a special type of RRSP that holds locked-in pension funds. Some provinces use Locked-in RRSP while others use the term LIRA. Generally, funds cannot be withdrawn until converted into a LIF, RRIF or Annuity that is used to provide Retirement Income.

 

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