Thanks Adam! I retired almost 2 years ago now. I was originally going to leave my Defined Contribution pension invested until 71. I also have a DB Pension. Instead I took your advice last year and unlocked 50% of my federally registered LIRA and transferred the monies into an my RRSP. Was easy to do. I also set up max withdrawals annually from the remaining balance in my LIF. So appreciate your channel and all your great advice!
Thank you for posting so much valuable content!! I am wondering if can post content for those who are well past retirement age but still working full time. At age 71 I will start receiving money from my company pension. This will place me in a higher tax category. I also have a LIRA from a previous employer that I need to take into account in my planning. How can I best keep my taxes low on this money. I have heard that I can put the money in a TFSA. I would like to see a video on this please. Thank you!
in my case Chris Ryan Stewart has assisted me in doing that effectively, I'm not an expert so I lack experience in investment strategies, I work and my consultant handles the rest.
Not sure about the “need” to convert before retirement. Mine stayed where it is at my retirement. It’s only now two years later that the admin is calling about a Lira and what to do to save taxes going forward. Otherwise they’re not unhappy my pension is still outside a lira.
Adam. What if I have a Lira with an online investment company and I own stocks and am earning yearly dividends and gaining some capital gains ( not lately though). I am 62 and want to retire in 2 years but if I unlock 50% and move that to an rrsp to ladder with some other money in a gic rrsp… then the if I understand you correctly, the rest of the lira with the online investment company will have a maximum annual amount I have to withdraw and stocks will have to be sold. This part is confusing 😮
My bank told me that here in Alberta i acn unlock up to the 50% anytime after age 50 not 55?? I will definitely need to look into which age is correct. Thanks for the video although the age to unlock has me worried lol
You keep using the term "when you retire". For those who retire early and don't necessarily need the LIRA income (I think you're using the term 'when you retire' to mean, 'when you need the money', is that correct?) when is the best time to convert a LIRA to a LIF and when must you do this? Also, once you hit 65, wouldn't the funds instead go into a RRIF, not a RRSP when you unlock it? That also wasn't clear to me. If it does go into an RRSP, I presume it's not considered an RRSP contribution generating a tax refund? Thank you, this was informative.
Thanks for the video. I can never find the answer to the following. I'm 65 in Ontario and plan on converting and unlocking my LIRA in Jan/25. Do I have to withdraw money from the RIF if I only want money from the LIF in the first year. As well, you mentioned unlocking into a RSP. Can I do that 50% LIF 50% RSP and convert to a RIF at a later date ? Hope someone knows the answer. Thanks
Can you unlock the LIRA funds to move them to an RRSP even if your RRSP room is maxed out? Not sure if the LIRA funds were counted as RSP room the year they were deposited.
Yes. Your RRSP contribution room has already been adjusted due to pension contributions. The "pension adjustment" on your T4's over the years is what allows contribution room for the LIRA to be unlocked and transferred into your RRSP.
Every DB pension is so different and your age, years there etc will play a big factor. I would recommend attending one of your employer sponsored pension seminars. We have a few videos around DB pensions, here is one ua-cam.com/video/bnjhkI3gPr8/v-deo.html
1:15 My wife and I were just at the bank today because we both turned 71 in 2024 and it’s time to each get a LIF. My LIRA is Federal so I can do the 50% withdrawal into a RRIF ( but not without a notarized copy of what I I want to do by an independent authority?!?). She has an Ontario LIRA but was told she cannot withdraw the 50% as above because she is over 71 now. WTH. The first Notary speed bump seems unnecessary to me - is this a legit request? And the “you’re too old now to transfer out 50%” doesn’t even seem true. What are your thoughts on these 2 impediments?
I hate living in BC! 17 years of MPP locked in and I'll die way before I get to spend it. Because they are holding my money hostage I am missing out on investing my 300+k in a dividend ETF like SCHD that would pay me 5k a month in 10 years. Its criminal the way they control every part of our lives.
Hello Adam! I'm currently 62 Yo and have a LIRSP (LIRA - Federal) that I'm Investing on a DRIP on Questrade. At the same time I also have an RRSP which I plan to convert to RIF starting next year. I'm also planing in retiring abroad and since LIRSP can be moved to RRSP at 100% when I become a Non Resident, I wonder if I can still move it to the RIF account or only if it is an RRSP? Keep up with your excellent work!
Great video Adam! Where can we get the min and max RRIF and LIF % limits for each calendar year and by age - especially for Max withdrawal LIF which got converted from a federal pension plan which was in a LIRA?
I have a federal DC plan so when I move it to a LIF then I can move 50% to an RRSP is that my current RRSP or do I open another RRSP account for this 50% so I end up with two RRSPs. Thanks
How is this possible? If one must first open an LIF to move the contents of the LIRA acct. to the LIF, and that point can (in ONTARIO) unlock 50% by moving it to the RRSP. Isn't one then left with only the LIF acct? am I to understand that once the LIF is left with a balance considered low value, the LIF can be fully unlocked by transferring the remaining balance to the RRSP? Thanks Adam.
Adam, please confirm: I understand that for Quebec: "unlocking" doesn't exist...BUT if you move your LIRA to a "LIF that allows a temporary income", you can possibly receive a "temporary income" of up to around 26000$ a year (when over 55, I think). Can I decide what type of LIF (ie one allowing a temporary income) I can move my Quebec LIRA to?
I have seen a lot of people advising that LIRA should be unlocked as much as possible. But I wonder if that really only applies if the LIRA is a significant amount of the retirement money. In my case I have over $1.1million in my RRSP and only $170K in my LIRA, I'm 61, semi-retired but still doing consulting work three days a week. I can unlock 50% since I live in Ontario, but the form and procedures to do that look like it isn't worth the effort. Since the LIRA is only 13% of the total money I have in in retirement accounts, and well under 10% of my assets if I add up the TFSA, spousal RRSP and RESP accounts, should I really care if there is a maximum amount I can withdraw from the LIF?
Absolutely unlock it. No downside as it just moves to your RRSP where you have more flexibility. Would you rather have more or less flexibility in retirement around your income and taxes?
@@ParallelWealth I just took a look at Form 2, it looks much better than what it looked like the last time I thought about it. Now it is a fillable form, 6 or 7 years ago it was a photocopy of a photocopy of a photocopy and looked like it would be painful to work with. The old form was even at a 10 degree angle from being copied so many times.
I’m struggling to understand the withdrawal rates if I have a LIF and RIF. Like i understand that LIF has a maximum. But, would the RIF withdrawal rate be less since the LIF is being used also or are they the same rate for each account. IE: %2.85 of RIF and %2.85 for LIFz
One nagging question Adam-if the LIRA is quite significant, does one need the requisite RRSP “space” or is this one time conversion irrespective of available contribution room in one’s existing RRSP?
So I've been a good little saver and maxed out my RRSP and TFSA, I have a pension (DB/DC duo) that is now in the DB phase. The pension adjustment leaves very little room to contribute to my RRSP and will be like that until the end of my career. If all goes well and I'm retired at 55 (or earlier). It sounds to me like it would be a bad idea to unlock 50% of my LIRA at 50 (AB), and to draw down the RRSP and TFSA first?? I've been trying to understand LIRAs for a long time.
If you're asking about how the LIRA affects your RRSP contribution room, it does not. Your RRSP contribution room has already been lowered due to pension contributions "pension adjustment" on your T4. When you unlock the LIRA, the unlocked portion goes into your RRSP regardless of your contribution room being maxed or not.
On the surface, I would recommend saving your TFSA until you start taking OAS (or later). OAS has a clawback provision if your income is too high: TFSA withdrawals are not income and RRSP withdrawals are income. This is related to the RRSP burndown strategy. On the LIRA part, I agree with @dennismicallef9350.
Great video. One quick question. If my registered LIRA is from when I used to work in Ontario but now I live in Quebec. The rules for the LIRA in Ontario is still what I need to follow? Or is that what you mean by non-resident. I'm only retiring in about 7-8 yrs.
Great video, so informative as always. Is it possible to withdrawal from a LIF in the first year? I have both an RLIF and LIF (Ontario) which were setup and funded earlier this year. I was able to do the 50% unlocking on both but was told just recently that would have to wait until next year to start withdrawals? Thanks.
Adam, thank you very much for your video! How does it work if I have 2 LIRAs? Should I combine them in one before I start: 1) the 50% unlocking and 2) transfer to LIF? (for Alberta LIRA). I could not find an answer on your website.
You can combine of they fall under the same jurisdiction. Otherwise have to keep separate. If you can combine them, it does keep things more simple and less tax slips.
Hi Adam. Thank you for this video and for sharing so much useful info about retirement strategies. One question-does the “Province” apply to where you currently live or where the LIRA is from? Eg if I worked in ON and got a LIRA, but now live in BC, would I be able to unlock 50% when I convert to a RIF? Or am I now stuck with 0 because I live in BC? Thank you!!
I can answer this question, as I had the same situation. The LIRA should be according to the province the account was originally set up with. In your case (and mine), the LIRA would be subject to the Ontario rules. A caution: financial institutions frequently don't get this right . Hope this helps.
Correct, so-called financial advisors in financial institutions may not know this, or might be motivated to give you advice that is more beneficial to them, not to you. Been there, done that, they almost screwed me over. Re-watch this video at least, or talk to real qualified financial advisor. Note a detail that Adam didn't emphasize, but is shown in some of the slides: in most provinces you can initiate unlocking LIRA at age of 55, regardless if you plan to retire then or later. There's no downside in unlocking early, but the benefit is that this money is more flexible. The unlocking might take a few days, or few months if Scotia Bank f***cks you over and doesn't correct it until you reach out to managers manager and bitch about it (sorry, couldn't help myself).
You can leave it there with the dealer that manages the company pension, transfer it to a Lira with your advisor, and some let you Transfer it to your new work pension.
I am getting confused with the "minimum/maximum" withdrawal and the unlocking terminology. If I am ok with just drawing income between min&max, do I need to do any unlocking? It seems from your video that "unlocking" is just if you want to transfer it out of the LIF for flexibility (To a RRSP/RIF for instance).
You are actually talking about 2 things. Unlocking is the ability to transfer a portion of your LIF to an RRSP. This depends on the province as each province is different. The reason why you might want to do this is because an RRSP does not have a maximum withdrawal rate. This leads to your other question regarding minimum/maximum. When you set up a LIF or a RIF the government mandates that you need to withdraw specific amounts each year. For a LIF they stipulate the minimum you must withdraw and a maximum you can withdraw. For a RIF they stipulate a minimum but there is no maximum which is why many convert as much of their LIF to a RIF if their province allows this to be done.
@@paulmarshall4794 thank you, that's actually what I thought but for some reason I am having trouble just setting up a regular withdrawal from a LIF (within the minimum/maximum range) with questrade (the joy of diy investing!). They want me to fill out an unlocking form even if I just want to withdraw within the range.
What is never explained (in any video) is exactly how a self-directed RRSP/LIRA is converted to a RRIF/LIF. Does one simply call or email the broker and ask them to change the title of the account on the day of retirement and the investments remain unchanged?
For Ontario chartered Locked-in RRSP (LIRA), I believe the unlocked age is 55. So you would need to be age 55 or older to convert your LIRA to Life Income Fund (LIF). For me I contacted my brokerage to initiate the conversion to LIF. I think within 60 days of opening a LIF account you can unlock half the holdings in LIF to an RRSP account. I also converted an RRSP to an RRIF and this was personal experience. With TD Waterhouse discount brokerage now you need to open an RRIF online (or to open an RRIF at a TD Canada Trust branch). If it is a spousal RRSP you need to open a spousal RRIF. You can roll over partial holdings or entire holdings of your RRSP(s) in kind to your RRIF account. You can have multiple RRIF accounts. My LIF account was setup several years ago. At the time TD Waterhouse helped me to setup the account on the phone. Now the rules may be different and you may have to open the LIF account online as I did with my RRIF account.
The company I had my pension through let me know my options, most of which involved going to your bank and filling out forms to have the funds transferred to the bank.
Of course you have to open new accounts, a LIF to receive your current LIRA investments, and a RRIF for your RRSP investments, with that same discount broker you have your current RRSP and LIRA account with.
Nice video, but 1 question. When can you start withdrawing from your LIRA/convert it to a LIF? Is there a minimum age? I'm not talking about unlocking into a RRSP/RRIF, I'm talking about retiring early (age 45 or so) and wanting to get some of the funds from my LIRA. Does that fall into the "4 ways to unlock a LIRA early" part you talked about? Thanks
You must be at least 55 years old to unlock (where possible) or convert to a LIF. If I’m not mistaken, in cases of financial hardship, some exceptions for early access may be possible.
I do not think that applies to my situation since I am self-employed, but in a distant past I did work for corporations and quite possibly I paid into some form of pension plans and I will have to look into this at some point! Still as usual very interesting video. Thank YOU!
Nice video, Adam! Can you please discuss about LIRA during the accumulation phase? How to balance contributions between RRSP and TFSA when you already have a LIRA? Thanks!
Thanks Adam! I retired almost 2 years ago now. I was originally going to leave my Defined Contribution pension invested until 71. I also have a DB Pension. Instead I took your advice last year and unlocked 50% of my federally registered LIRA and transferred the monies into an my RRSP. Was easy to do. I also set up max withdrawals annually from the remaining balance in my LIF. So appreciate your channel and all your great advice!
I’m
Hi Adam, I like the channel, the saying is “…fell swoop” rather than “…foul swoop”, as in the last cut to fell a tree.
Thank you for this video and all the work you do to help people through your channel. Great job!
Thank you! Yup..unlock that LIRA
Thank you for posting so much valuable content!! I am wondering if can post content for those who are well past retirement age but still working full time. At age 71 I will start receiving money from my company pension. This will place me in a higher tax category. I also have a LIRA from a previous employer that I need to take into account in my planning. How can I best keep my taxes low on this money. I have heard that I can put the money in a TFSA. I would like to see a video on this please. Thank you!
Please update your information on LIRA unlocking conditions in MB and inform your subscribers. Thanks
Hi Adam...I'm 61,I have a LIRA,and I haven't retired yet. Can I unlock my LIRA now and transfervto my RRSP ?
in my case Chris Ryan Stewart has assisted me in doing that effectively, I'm not an expert so I lack experience in investment strategies, I work and my consultant handles the rest.
nice video . i know im 55 and not ready to retire but learned a lot in this video about lira’s and life… thank you
Thank you for this video. I wasn’t aware of the provincial registration piece and have been having trouble finding much info on the CRA website.
While LIRA is the most restrictive account, it is also the most well protected asset. It is beyond reach of creditors in most situations。
Not sure about the “need” to convert before retirement. Mine stayed where it is at my retirement. It’s only now two years later that the admin is calling about a Lira and what to do to save taxes going forward. Otherwise they’re not unhappy my pension is still outside a lira.
Adam. What if I have a Lira with an online investment company and I own stocks and am earning yearly dividends and gaining some capital gains ( not lately though). I am 62 and want to retire in 2 years but if I unlock 50% and move that to an rrsp to ladder with some other money in a gic rrsp… then the if I understand you correctly, the rest of the lira with the online investment company will have a maximum annual amount I have to withdraw and stocks will have to be sold. This part is confusing 😮
Taxes have to be paid on withdrawals, but you could move the rest of the stocks each year to TFSA or non reg.
My bank told me that here in Alberta i acn unlock up to the 50% anytime after age 50 not 55?? I will definitely need to look into which age is correct. Thanks for the video although the age to unlock has me worried lol
You keep using the term "when you retire". For those who retire early and don't necessarily need the LIRA income (I think you're using the term 'when you retire' to mean, 'when you need the money', is that correct?) when is the best time to convert a LIRA to a LIF and when must you do this? Also, once you hit 65, wouldn't the funds instead go into a RRIF, not a RRSP when you unlock it? That also wasn't clear to me. If it does go into an RRSP, I presume it's not considered an RRSP contribution generating a tax refund?
Thank you, this was informative.
I am from Alberta and was told that your spouse has to also sign to unlock you LIRA?
Thank you for another very informative video.
Good to know, thanks for the video.
Thanks for the video. I can never find the answer to the following. I'm 65 in Ontario and plan on converting and unlocking my LIRA in Jan/25. Do I have to withdraw money from the RIF if I only want money from the LIF in the first year. As well, you mentioned unlocking into a RSP. Can I do that 50% LIF 50% RSP and convert to a RIF at a later date ? Hope someone knows the answer. Thanks
Hi Adam, Does the Small Account Provision apply to both LIRA’s and LIF’s ?
Can you unlock the LIRA funds to move them to an RRSP even if your RRSP room is maxed out? Not sure if the LIRA funds were counted as RSP room the year they were deposited.
Yes. They are both registered.
Yes. Your RRSP contribution room has already been adjusted due to pension contributions. The "pension adjustment" on your T4's over the years is what allows contribution room for the LIRA to be unlocked and transferred into your RRSP.
i cannot find anyting on your channel about Municipal Pension..can you do video on how it works and amount we get when you retire?
Every DB pension is so different and your age, years there etc will play a big factor. I would recommend attending one of your employer sponsored pension seminars. We have a few videos around DB pensions, here is one ua-cam.com/video/bnjhkI3gPr8/v-deo.html
What are the tax implications for a Canada US dual citizen when withdrawing from a LIRA?
1:15 My wife and I were just at the bank today because we both turned 71 in 2024 and it’s time to each get a LIF. My LIRA is Federal so I can do the 50% withdrawal into a RRIF ( but not without a notarized copy of what I I want to do by an independent authority?!?). She has an Ontario LIRA but was told she cannot withdraw the 50% as above because she is over 71 now. WTH. The first Notary speed bump seems unnecessary to me - is this a legit request? And the “you’re too old now to transfer out 50%” doesn’t even seem true. What are your thoughts on these 2 impediments?
Yes the notary is required for the Fed unlocking. The too old thing - that's a first! Definitely not the case.
Thanks, much appreciated.
I hate living in BC! 17 years of MPP locked in and I'll die way before I get to spend it. Because they are holding my money hostage I am missing out on investing my 300+k in a dividend ETF like SCHD that would pay me 5k a month in 10 years. Its criminal the way they control every part of our lives.
Hello Adam! I'm currently 62 Yo and have a LIRSP (LIRA - Federal) that I'm Investing on a DRIP on Questrade. At the same time I also have an RRSP which I plan to convert to RIF starting next year. I'm also planing in retiring abroad and since LIRSP can be moved to RRSP at 100% when I become a Non Resident, I wonder if I can still move it to the RIF account or only if it is an RRSP? Keep up with your excellent work!
Yes can move to RRIF once non-resident for 2 years.
Great video Adam! Where can we get the min and max RRIF and LIF % limits for each calendar year and by age - especially for Max withdrawal LIF which got converted from a federal pension plan which was in a LIRA?
Google.
I have a federal DC plan so when I move it to a LIF then I can move 50% to an RRSP is that my current RRSP or do I open another RRSP account for this 50% so I end up with two RRSPs. Thanks
So.. In Ontario, 55+, $50K LIRA, I can transfer 100% to an RRSP under 1) 50% rule, then 2) Low-value rule (40% of 66,000 = $26,400)?
Good question.
I believe Yes, but over a 2 year period. Fully unlocked in year 2.
Yes, correct. We do it often for clients
How is this possible? If one must first open an LIF to move the contents of the LIRA acct. to the LIF, and that point can (in ONTARIO) unlock 50% by moving it to the RRSP. Isn't one then left with only the LIF acct? am I to understand that once the LIF is left with a balance considered low value, the LIF can be fully unlocked by transferring the remaining balance to the RRSP? Thanks Adam.
Adam, please confirm: I understand that for Quebec: "unlocking" doesn't exist...BUT if you move your LIRA to a "LIF that allows a temporary income", you can possibly receive a "temporary income" of up to around 26000$ a year (when over 55, I think). Can I decide what type of LIF (ie one allowing a temporary income) I can move my Quebec LIRA to?
I have seen a lot of people advising that LIRA should be unlocked as much as possible. But I wonder if that really only applies if the LIRA is a significant amount of the retirement money. In my case I have over $1.1million in my RRSP and only $170K in my LIRA, I'm 61, semi-retired but still doing consulting work three days a week. I can unlock 50% since I live in Ontario, but the form and procedures to do that look like it isn't worth the effort. Since the LIRA is only 13% of the total money I have in in retirement accounts, and well under 10% of my assets if I add up the TFSA, spousal RRSP and RESP accounts, should I really care if there is a maximum amount I can withdraw from the LIF?
Absolutely unlock it. No downside as it just moves to your RRSP where you have more flexibility. Would you rather have more or less flexibility in retirement around your income and taxes?
@@ParallelWealth I just took a look at Form 2, it looks much better than what it looked like the last time I thought about it. Now it is a fillable form, 6 or 7 years ago it was a photocopy of a photocopy of a photocopy and looked like it would be painful to work with. The old form was even at a 10 degree angle from being copied so many times.
I’m struggling to understand the withdrawal rates if I have a LIF and RIF. Like i understand that LIF has a maximum. But, would the RIF withdrawal rate be less since the LIF is being used also or are they the same rate for each account.
IE: %2.85 of RIF and %2.85 for LIFz
One nagging question Adam-if the LIRA is quite significant, does one need the requisite RRSP “space” or is this one time conversion irrespective of available contribution room in one’s existing RRSP?
No contribution room needed.
So I've been a good little saver and maxed out my RRSP and TFSA, I have a pension (DB/DC duo) that is now in the DB phase. The pension adjustment leaves very little room to contribute to my RRSP and will be like that until the end of my career. If all goes well and I'm retired at 55 (or earlier). It sounds to me like it would be a bad idea to unlock 50% of my LIRA at 50 (AB), and to draw down the RRSP and TFSA first?? I've been trying to understand LIRAs for a long time.
If you're asking about how the LIRA affects your RRSP contribution room, it does not.
Your RRSP contribution room has already been lowered due to pension contributions "pension adjustment" on your T4. When you unlock the LIRA, the unlocked portion goes into your RRSP regardless of your contribution room being maxed or not.
On the surface, I would recommend saving your TFSA until you start taking OAS (or later). OAS has a clawback provision if your income is too high: TFSA withdrawals are not income and RRSP withdrawals are income. This is related to the RRSP burndown strategy. On the LIRA part, I agree with @dennismicallef9350.
Great video. One quick question. If my registered LIRA is from when I used to work in Ontario but now I live in Quebec. The rules for the LIRA in Ontario is still what I need to follow? Or is that what you mean by non-resident. I'm only retiring in about 7-8 yrs.
Would stay Ontario legislation.
@@ParallelWealth thanks for your response and keep up the good work on those videos
Great video, so informative as always. Is it possible to withdrawal from a LIF in the first year? I have both an RLIF and LIF (Ontario) which were setup and funded earlier this year. I was able to do the 50% unlocking on both but was told just recently that would have to wait until next year to start withdrawals? Thanks.
Adam, thank you very much for your video! How does it work if I have 2 LIRAs? Should I combine them in one before I start: 1) the 50% unlocking and 2) transfer to LIF? (for Alberta LIRA). I could not find an answer on your website.
You can combine of they fall under the same jurisdiction. Otherwise have to keep separate. If you can combine them, it does keep things more simple and less tax slips.
I have tried unlocking my Federal LIRA. It seems the form needs to be notarized before my bank will accept it. Has anyone else run into this?
Yes 100% needs to be notarized. Only Federal LIRAs need this. It's so dumb, but is the process.
Hi Adam. Thank you for this video and for sharing so much useful info about retirement strategies. One question-does the “Province” apply to where you currently live or where the LIRA is from? Eg if I worked in ON and got a LIRA, but now live in BC, would I be able to unlock 50% when I convert to a RIF? Or am I now stuck with 0 because I live in BC? Thank you!!
I can answer this question, as I had the same situation. The LIRA should be according to the province the account was originally set up with. In your case (and mine), the LIRA would be subject to the Ontario rules. A caution: financial institutions frequently don't get this right .
Hope this helps.
Correct, so-called financial advisors in financial institutions may not know this, or might be motivated to give you advice that is more beneficial to them, not to you. Been there, done that, they almost screwed me over. Re-watch this video at least, or talk to real qualified financial advisor. Note a detail that Adam didn't emphasize, but is shown in some of the slides: in most provinces you can initiate unlocking LIRA at age of 55, regardless if you plan to retire then or later. There's no downside in unlocking early, but the benefit is that this money is more flexible. The unlocking might take a few days, or few months if Scotia Bank f***cks you over and doesn't correct it until you reach out to managers manager and bitch about it (sorry, couldn't help myself).
Ed is correct here. Thanks Ed
What happens to a LIRA if left the employer before retirement?
You can leave it there with the dealer that manages the company pension, transfer it to a Lira with your advisor, and some let you Transfer it to your new work pension.
Thank you very much as always Adam! I sincerely appreciate all your hard work.
My pleasure!
I am getting confused with the "minimum/maximum" withdrawal and the unlocking terminology. If I am ok with just drawing income between min&max, do I need to do any unlocking? It seems from your video that "unlocking" is just if you want to transfer it out of the LIF for flexibility (To a RRSP/RIF for instance).
Yes you need to unlock to LIF by age 71.
You are actually talking about 2 things. Unlocking is the ability to transfer a portion of your LIF to an RRSP. This depends on the province as each province is different. The reason why you might want to do this is because an RRSP does not have a maximum withdrawal rate. This leads to your other question regarding minimum/maximum. When you set up a LIF or a RIF the government mandates that you need to withdraw specific amounts each year. For a LIF they stipulate the minimum you must withdraw and a maximum you can withdraw. For a RIF they stipulate a minimum but there is no maximum which is why many convert as much of their LIF to a RIF if their province allows this to be done.
@@paulmarshall4794 thank you, that's actually what I thought but for some reason I am having trouble just setting up a regular withdrawal from a LIF (within the minimum/maximum range) with questrade (the joy of diy investing!). They want me to fill out an unlocking form even if I just want to withdraw within the range.
Adam, thank you very much! Do I have to retire first? And then convert to LIF?
No, you can do before you retire - but just keep an eye on your income brackets
What is never explained (in any video) is exactly how a self-directed RRSP/LIRA is converted to a RRIF/LIF. Does one simply call or email the broker and ask them to change the title of the account on the day of retirement and the investments remain unchanged?
For Ontario chartered Locked-in RRSP (LIRA), I believe the unlocked age is 55. So you would need to be age 55 or older to convert your LIRA to Life Income Fund (LIF). For me I contacted my brokerage to initiate the conversion to LIF. I think within 60 days of opening a LIF account you can unlock half the holdings in LIF to an RRSP account.
I also converted an RRSP to an RRIF and this was personal experience. With TD Waterhouse discount brokerage now you need to open an RRIF online (or to open an RRIF at a TD Canada Trust branch). If it is a spousal RRSP you need to open a spousal RRIF. You can roll over partial holdings or entire holdings of your RRSP(s) in kind to your RRIF account. You can have multiple RRIF accounts.
My LIF account was setup several years ago. At the time TD Waterhouse helped me to setup the account on the phone. Now the rules may be different and you may have to open the LIF account online as I did with my RRIF account.
you work through your broker, investments remain the same. There are a number of forms to fill out. Still easy peasy.
@@rb239rtr Thanks for the insightful reply. Much appreciated.
The company I had my pension through let me know my options, most of which involved going to your bank and filling out forms to have the funds transferred to the bank.
Of course you have to open new accounts, a LIF to receive your current LIRA investments, and a RRIF for your RRSP investments, with that same discount broker you have your current RRSP and LIRA account with.
Nice video, but 1 question. When can you start withdrawing from your LIRA/convert it to a LIF? Is there a minimum age?
I'm not talking about unlocking into a RRSP/RRIF, I'm talking about retiring early (age 45 or so) and wanting to get some of the funds from my LIRA. Does that fall into the "4 ways to unlock a LIRA early" part you talked about? Thanks
You must be at least 55 years old to unlock (where possible) or convert to a LIF. If I’m not mistaken, in cases of financial hardship, some exceptions for early access may be possible.
@@James_48thanks for answering!
I do not think that applies to my situation since I am self-employed, but in a distant past I did work for corporations and quite possibly I paid into some form of pension plans and I will have to look into this at some point!
Still as usual very interesting video. Thank YOU!
Nice video, Adam! Can you please discuss about LIRA during the accumulation phase? How to balance contributions between RRSP and TFSA when you already have a LIRA? Thanks!