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What Is A Locked-In Retirement Account (LIRA)?


A LIRA is a registered pension account in Canada that is specifically designed to store locked-in retirement funds and does not allow you to withdraw cash before you retire. Read this blog to find more about LIRA.

You have heard of RRSPs and TFSAs, but do you know what a LIRA is?  

Your pension will be converted into a LIRA if your employer’s pension plan insures you, has resigned from your job, or got laid off. Keep reading this blog if you want to understand more about this account. 

What is a Locked-In Retirement Account (LIRA)?

A Locked-In Retirement Account (LIRA) is a registered retirement savings account. You cannot contribute to this account, and you cannot even take money out of it. If you have a pension plan via your workplace, you can transfer the funds to your LIRA when you leave your job. The federal or provincial pension legislation governs the Locked-in retirement accounts.  

You will not access your funds when you need them for matters like education, housing, or other needs. But the money will stay locked in until you retire. You can keep your LIRA until December 31 of the year you turn 71.

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What happens when you retire?

When you retire, you need to turn your LIRA into either a life annuity, Life Income Fund (LIF), Locked-In Retirement Income Fund (LRIF), or a Prescribed Registered Retirement Income Fund (PRIF).  

  • If you convert your LIRA to a life annuity, you will receive a set amount every year will not have to worry about how much you can withdraw each year. You will regularly get paid for the rest of your life.  
  • You will have a minimum and maximum annual percentage that you must remove from your account if you put your money into a Life Income Fund (LIF). These limits ensure that your pension funds will provide you with income for the rest of your life.  
  • A locked-in account (LRIF) is created with funds from a registered pension plan (RPP). A Locked-In Retirement Income Fund (LRIF) is a registered retirement income fund that has been locked in (RRIF). It has a minimum and maximum withdrawal amount.  
  • If you invest in the Prescribed Registered Retirement Income Fund (PRIF), you can convert your money into a pension plan and collect payments when you retire.  



  • Holds pension money, you cannot contribute to LIRA.  
  • If you want to withdraw money, you will have to transfer the funds to a LIF or Life Annuity.
  • As provinces govern the LIRA, the legislation may differ from one to the next.  


  • Holds money you have contributed on your own.  
  • You can withdraw money whenever you want to, and there are no limits on how much you can start.  
  • You are eligible to be a part of the Homebuyers plan and the Lifelong learning plan.

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