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Locked-in retirement account (LIRA)

Keep your savings safe for retirement

A locked-in retirement account keeps the money in your old pension plan set aside until you retire.

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  • Safeguard your pension

    Because you can only use a LIRA for retirement income, you know that money is set aside for your future.

  • Guide your investments

    You can work with an advisor to choose how to invest your money to help grow your eventual income.

  • Choose your income path

    Choose whether to turn your LIRA into a life annuity or another income fund when you retire.

What is a locked-in retirement account (LIRA)?

If you have a pension plan through your employer and you leave your job, you’ll have to decide what to do with your pension. One of your options may be to transfer it into a LIRA.

In a LIRA, your savings will be kept “locked-in,” which means you won’t be able to withdraw money until you retire.

On one hand, that means you can’t access it for expenses like education or housing; on the other, that makes it easier to be sure your money is there when you’re ready to turn it into retirement income.

Let’s find out if a LIRA is right for you.

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How does a LIRA compare to other retirement savings products?

Depending on the pension plan you’re leaving, you may have options in terms of what to do with your money. Talk to your advisor about what option may work best for you.

Locked-in retirement account (LIRA)

Registered pension plan (RPP)

Registered retirement savings plan (RRSP)

What is it for?

Retirement savings

Retirement savings

Retirement savings, housing, education

How can you get one?

When you leave an employer where you had a pension plan, you can choose to turn it into a LIRA

Through an employer

Through an employer or your own advisor

How do taxes work?

Your money won’t be taxed until you withdraw it (after setting up a life annuity or another retirement income product)

Your contributions are tax-deductible

Your money won’t be taxed until you withdraw it

Employer contributions are exempt from payroll taxes

Your contributions (and any employer contributions made on your behalf) are tax-deductible, up to a limit

Your money won’t be taxed until you withdraw it

Employer contributions are treated as taxable income on your T4

When can you contribute money?

You can’t contribute money, but depending on your plan, you may be able to transfer locked-in funds from another registered plan.

You may be required to contribute a percent of your salary and may be able to choose to contribute more.  Contributions you and your employer make can't exceed an annual limit.

There is an annual limit to the amount you can contribute.

When can you withdraw your money?

When you retire and turn your savings into a retirement income account or annuity

Depending on the plan and applicable legislation, there are restrictions

Depending on the plan and applicable legislation, there are restrictions

What happens when you retire?

You must turn your savings into your retirement income by Dec. 31 of the year you turn 71.

You must turn your savings into your retirement income by Dec. 31 of the year you turn 71.

You must turn your savings into your retirement income by Dec. 31 of the year you turn 71.

Talk to an advisor
Learn more about pension plansOpens in a new window

Learn more about RRSPs

What happens when you retire?

When you retire, or when you reach a certain age, the money you’ve saved will need to turn into retirement income. You can do that by turning your LIRA into a life annuity, a life income fund (LIF), or another retirement income plan available to you. Your options depend on the provincial or federal jurisdiction that regulates your pension funds. 

Life annuity

Make a lump-sum payment, then receive a consistent income for life.

Learn more about annuities

Life income fund

Moving your money from a LIRA to a LIF allows you to withdraw a certain amount of that money regularly.

Learn more about LIFs

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.