LIRA/LRSP/LIF/LRIF

LIRAs are created from funds from a Defined Contribution Pension Plan after an employee has left the company. The funds are locked-in, that is, they cannot be accessed until retirement. LRSPs are for federally regulated companies (select FED for the province), and LIRAs are for provincially regulated companies, but they function the same.

A LIRA/LRSP cannot be withdrawn from or contributed to. We now allow partial LIRA conversions to LIFs from age 65 in order for you to be able to take advantage of the pension tax credit and pension income splitting. Any withdrawal from LIRAs from age 65 will automatically qualify in the TIME MACHINE (in real life, there will be paperwork, talk to your LIRA provider.)

LIRAs/LRSPs must be converted into Life Income Funds (LIF) or Locked-In Retirement Income Funds (LRIF) at retirement in order to provide pension income.

The TIME MACHINE will automatically convert the LIRA/LRSP account at the age that you have specified (which must be between 54 and 71).

LIFs and LRIF, like RRIFs, have minimum withdrawal limits, and, unlike RRIFs, may have maximum withdrawal limits in some provinces. These limits vary by province and with the long-term Canada bond rate (CANSIM). In some provinces, your age and returns from the past year are a factor. The rules and calculations surrounding LIFs can be quite complicated, so you should always check with the plan holder before making a withdrawal.

The TIME MACHINE will always make the minimum withdrawals required by these plans. If additional funds are necessary, withdrawals will be made considering to your planned withdrawals and priorities, but only to the allowed maximum.

For current LIFs and LRIF, we ask for the balance at the end of last year to calculate the minimum withdrawal. You should update that value every January by editing the account properties until you reach this screen.

Also in January you would zero the total withdrawn year to date. You should update the total withdrawn year to date any time you make a withdrawal from the account.