Getting money out of your LIRA
If you have a locked-in retirement account (LIRA), it’s because you’ve transferred money into it from a former employer’s pension plan or from a former spouse’s employer pension plan, for example, when marital assets were divided during a divorce. For that reason, typically the only way to unlock a LIRA is to retire, and the earliest age you can do that is 55.
LIRA withdrawal exceptions
Different jurisdictions have different rules for LIRA unlocking other than at retirement. Some reasons are common to more than 1 jurisdiction:
- Small amounts: If the amount of money you have in your LIRA is considered too small be useful as a pension, you may be able to unlock it.
- Shortened life expectancy: If a doctor provides an opinion that you have a terminal illness or disability that will significantly shorten your life, you may be able to unlock the money in your LIRA.
- Non-residence in Canada: If the Canada Revenue Agency (CRA) confirms in writing that you’re a non-resident of Canada for tax purposes, you may be able to unlock your LIRA.
- Financial hardship: In some jurisdictions, if you’re facing financial hardship, you may apply to unlock a portion or all the money in your LIRA.
- 50% unlocking: Depending on your jurisdiction, you may qualify to unlock up to 50% of your LIRA funds and transfer them to a registered retirement savings account (RRSP).
Check the rules for your specific LIRA to confirm your options:
- Federal Opens a new website in a new window(includes Yukon, NWT and Inuvik)
- British ColumbiaOpens a new website in a new window
- AlbertaOpens a new website in a new window
- SaskatchewanOpens a new website in a new window
- ManitobaOpens a new website in a new window
- OntarioOpens a new website in a new window
- QuebecOpens a new website in a new window
- Nova ScotiaOpens a new website in a new window
- Newfoundland and LabradorOpens a new website in a new window
- New BrunswickOpens a new website in a new window
LIRAs don’t exist in Prince Edward Island.
Paying tax on LIRA withdrawals
You’ll pay income tax on any money you receive from an unlocked LIRA, or from withdrawals from a LIF or annuity into which you’ve transferred your LIRA funds.