There are two other types of locked-in funds: Life Retirement Income Funds (LRIFs) and LIF/LRIFs

A Life Income Fund (LIF)

• can receive transfers from
  • LIRAs (Locked-In RRSP)
  • another LIF
  • locked-in pension funds
  • pension funds

Advantages

• owner controls the income received (within limits)
• principal and income are tax-sheltered until withdrawn
• investment choices is similar to RRSPs and LIRAs
• minimum and maximum withdrawal limits to provide regular income to age 80

Disadvantages

• minimum age to open: 55 (none for rrifs)
• must use the remaining balance to buy a life annuity by December 31 of the year in which annuitant turns 80

Withdrawals

• withdrawals start by December 31 of the year following the opening of the LIF
• minimum withdrawals
• maximum withdrawals
  • formula applies Term Certain Annuity to age 90 to the beginning of year find value
    • varies by province and maybe by year
  • prevents cashing out (RRIF can be cashed out in full at any time)
• withdrawals above the minimum are subject to withholding tax (like RRIF)

Death

• at death, same options as with RRIF: rollover to spouse’s RRSP, RRIF or use to buy annuity

LIF/LRIF

• minimum withdrawal based on same formula as for RRIF
• maximum withdrawal based on federal and provincial pension legislation