What is a LIRA and how should you invest in it?

What is a LIRA and how should you invest in it?

Got a Locked-In Retirement Account (LIRA)?

On the cusp on getting a Locked-In Retirement Account thanks to your recent workplace changes?

What the heck is a LIRA and why does investing have to be a bunch of alphabet soup?

All great questions readers.

Thanks to more reader questions, I’ve updated this post recently to highlight what a LIRA is, how you can consider investing in it, and how I’m investing in my LIRA as I consider semi-retirement in the coming years.

First up, what is a LIRA?

At the core, a LIRA is like an RRSP but locked-in hence the name.

A LIRA stands for “Locked-In Retirement Account”.

So, a Locked-In Retirement Account (LIRA) is similar but not the same as a Registered Retirement Savings Plan (RRSP). Sure, they are both designed for investing (you can read up on RRSPs in my 101 post here) but a LIRA differs in how it originates. 

Here is a good comparison table:

Locked-in retirement account (LIRA)
Registered retirement savings plan (RRSP)
What is it for?
Retirement savings.
Retirement savings, can include 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 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) (e.g., LIF = Life Income Fund)
·       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.
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.
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.
Other Reading:
Read on!
Learn more about RRSPs on my site here.

A LIRA is basically designed to hold pension money outside of a pension plan.

In fact, you can’t own a LIRA unless one of the following occurs:

  1. You have a workplace pension plan and you move jobs (voluntarily or involuntarily), your pension money from your former employer’s pension plan goes into a LIRA. If you have a LIRA it’s because you were part of a pension plan with a previous employer, OR
  2. You receive money from your former spouse’s employer pension plan, during the division of assets when you divorce, for example.

LIRAs are typically established when you leave an organization and you want to take the pension money you’ve accumulated as part of that pension plan with you. If you have a LIRA or you were asked to establish a LIRA, chances are you were part of a company pension plan at some point.

Recall there are two key types of pension plans – defined contribution and defined benefit. If you are fortunate to have a pension plan at work then I would encourage you to find out which one you can contribute to and all the rules associated with it!

Further Reading: Should I take the commuted value of my pension?

Unlike an RRSP, you cannot contribute/add new money to a LIRA*

*There are however some cases instances/cases that can apply to financial hardship. 

Depending on the jurisdiction the pension was registered in, LIRAs can be managed federally or under provincially regulated pension laws. Like an RRSP though, a LIRA can hold you various investment products or securities such as GICs, cash, bonds, stocks, ETFs and more for long-term tax-deferred growth.

On that note, once you’ve converted your employer pension to a LIRA, you can have full control over the investments inside the account like a self-directed RRSP. So, if you leave your job for a new one whereby you had a workplace pension (or if you, unfortunately, get laid off from work), that workplace pension will be converted to a LIRA. 

Second, how do you get money out of the LIRA?

Even though you can’t make withdrawals from a LIRA, you can get your money out at some point. You can also be very tax-efficient about it.

What I mean is, to withdraw money from your LIRA before age 65, consider the following:

  1. Open a Life Income Fund (LIF) depending on your age; provincial criteria.
  2. Transfer money from your LIRA to your LIF.
  3. Make your maximum withdrawals. (See table below.)
  4. Next, invest money withdrawn inside Tax-Free Savings Account (TFSA) for tax efficiency.
  5. Close your LIF after account depleted. 

Of course, you don’t have to move money from your LIF to your TFSA. You can spend it as you please!

Once a LIRA is converted to a LIF there is very little flexibility on annual withdrawals. Once converted to a LIF there is a minimum withdrawal and a maximum withdrawal range based on your age and the size of the portfolio at the beginning of the year. These min and max withdrawals are slightly different depending on where the LIF is regulated, either provincially or federally.

What is a LIF?

A Life Income Fund (LIF) is a registered account that pays you income from your locked-in pension investments.

A LIF is like a RRIF (Registered Retirement Income Fund) that is meant to provide retirement income throughout your life, so the investments can’t be withdrawn all at one time. LIFs are similar to Locked-in Retirement Income Funds (LRIFs) in that they also give you full control over your investments and
have a minimum and maximum payment, but how the maximum payment amount is calculated is different than with other plans.

In some provinces, you may be required to convert your LIF to an annuity at age 80 as well.

Below is a table that shows the minimum and maximum withdrawal percentages for 2023 by province.

What is a LIRA and how should you invest in it

See more of this table after age 71 from this source here:


When it comes to initiating your LIF, again a reminder: once you start the income stream for life it keeps flowing.

When to start your LIF may factor into when you take CPP or OAS decisions.

Further Reading: When to take your Canada Pension Plan (CPP) benefit.

When to take your CPP benefit

Can you “unlock” your LIRA? You bet, but it depends!

Some provinces allow the “unlocking” of all or a portion of a LIRA, LIF or LRIF under certain circumstances.

In addition, depending on your province, you might be able to “unlock” 50% of your LIRA with no limits.

Thankfully, here in Ontario where I live we have that feature in the regulation – a feature I intend to take advantage of myself!!

In Ontario, individuals aged 55 or older will be entitled to a one-time conversion of up to 50% of holdings value into a tax-deferred savings vehicle with no maximum withdrawal limits. If the funds are transferred to the locked-in fund’s owner’s own RRSP or RRIF, this does not require contribution room, and the owner is not taxed until the funds are later withdrawn from the RRSP or RRIF.

Check out Taxtips.ca that have an entire page dedicated to this subject.

Be mindful you have only 60 days to make any transfer after unlocking with your financial institution. 

Further still, up to 100% can be *unlocked if facing financial hardship or a shortened life expectancy. This can increase the flexibility on the timing of withdrawals. *There are however some cases instances/cases that apply.

What is a LIRA?

Why I have a LIRA

When I left Toronto (and my employer at the time) to move to Ottawa in 2001, I was forced to move my money into a LIRA (a few thousand bucks). 

I moved about $7k since I was forced to leave the employer pension plan when I voluntarily left that organization.

You can read more about my LIRA and how I have invested inside this account here.

For the last few years, I’ve invested my LIRA in low-cost ETF QQQ for the U.S. portion.

As recently as 2023, I put some money into CBIL ETF for the Canadian portion to secure 4%+ yield inside this retirement account I intend to tap in about five years. 

Your mileage may vary. 

You can read about some new cash alternative ETFs like CBIL here.

Are Cash-Alternative ETFs Right for You?

Third, how should you invest in a LIRA?

It’s impossible to provide any direct invest without understanding any investor complete picture but I can share this case study below I did a few years ago.

Check out this reader case study:

Mark, I subscribe to your site and I enjoy reading about your personal finance journey and DIY approaches to investing.  However, I work for a company that recently announced it is closing in May 2019. I would like to know what to invest in, given some of this pension money will need to be placed into a LIRA. I’m forty- eight years old so I still have a long ways to go before retirement, so I want this money to grow. I believe the LIRA amount will be close to $200,000 so it’s a lot of money. I definitely appreciate any insights – I know you can’t offer direct advice.

Keep up the great work!

Thanks for your question and yes, you are correct, I can’t offer direct advice but I can offer a take on what I would consider.

My Own Advisor take:

I’m going to make the following assumptions with your LIRA. You:

  1. Have a modest-risk tolerance.
  2. Are willing to “stick to the plan” – not trade in and out of ETF(s).
  3. Have modest investment knowledge.

For your LIRA, consider some of the following articles on my ETFs page.

Generally speaking, owning an all-in-one fund could provide you with one-stop shopping (and longer-term growth) whereby you don’t need to worry about any asset allocation or asset location over time.

Consider these low-cost all-in-one funds here, including VGRO, ZGRO, XGRO or HGRO for your LIRA.

The Best All-in-One Exchange Traded Funds

Fee-for-service financial planner take: 

Enter in Owen Winkelmolen is a fee-for-service financial planner (FPSC Level 1) and founder of PlanEasy.ca. He specializes in budgeting, cashflow, taxes & benefits, and retirement planning. 

When it comes to retirement planning, it’s important to look at retirement assets across the entire investment portfolio and not just account by account.

Mark wrote about asset allocation above, that’s important, but asset location is very important too – that describes the tax impact of holding specific retirement assets in specific accounts (GICs, bonds, Canadian equities, US equities, international equities).

When considering asset location, it’s important to understand how investments will eventually be withdrawn from each account as well. Some accounts allow for a lot of flexibility on withdrawals (like RRSPs and TFSAs), while other accounts are very restrictive (like RRIFs and LIFs).

Because of the restrictive nature of the LIRA/LIF we shared above, one strategy to consider is to keep LIRA accounts as small as possible.

What I mean is, as long as the overall asset allocation stays on target across the portfolio, consider lower return investments like bonds and GICs in the LIRA.

This way, higher return investments (i.e., more equities) can be held in the RRSPs and TFSAs.

Over time this allows the RRSPs and TFSAs to grow faster than the LIRA and helps to increase income flexibility in retirement (which could help avoid higher income tax rates and/or GIS (Guaranteed Income Supplement) & OAS (Old Age Security) claw backs).

You can read about OAS claw backs and much more about OAS in Mark’s post here.

Here is what I mean in a couple of charts just for illustrative purposes:

LIRA Image 1

While Mark’s suggestion to keep things very simple is OK, placing specific assets in specific accounts requires a level of flexibility that all-in-one funds just don’t allow. Having this bond-like flexibility in a LIRA would require at least a simple portfolio of ETFs and/or low-cost mutual funds.

This does create some complexity because assets would need to be rebalanced as mentioned above across the entire portfolio at least annually. The benefit (of bonds/fixed incomes in the LIRA) though is that the LIRA is much smaller in the future.

By using a more specific asset location strategy the LIRA could be $163.7K smaller, and up to $378.7K smaller if 50% is unlocked and placed into an RRSP. As a result, the mandatory withdrawals will be smaller as well – providing potential tax flexibility in retirement – but the portfolio overall is the same size ($1.48 M).

LIRA Image 2

On the flip side, sometimes “simplicity is the ultimate sophistication”.

If simplicity means that an investor (you in this case) will stick to the plan, then holding the same investment, or investment allocation, in each account might be the best option. All-in-one funds like the ones from Vanguard, iShares and other companies that Mark wrote about above, provide a simple and inexpensive way to create a highly diversified portfolio that automatically rebalances.

What is a LIRA and how should you invest in it summary

I think if you want to maximize your flexibility in retirement, minimize income tax, and minimize government claw backs, then it’s beneficial to look at your overall portfolio and retirement draw down plan when making investment decisions across different accounts.

When you to consider asset decumulation, I think the combination of “unlocking” your LIRA (if you can) and converting your LIRA to a LIF when you do unlock your LIRA is a great one-two punch.

This way, you can convert LIRA money to an income stream designed for life (LIF) and you are only taxed when you receive the income.

Years ago, I moved my money into low-cost QQQ.

I have since now added CBIL to my portfolio as well.

Let me know your thoughts on this updated post and happy to share more related LIRA, LIF or RRSP, RRIF content over time too!


Disclosure:  My Own Advisor, and the financial expert above, has provided this information for illustrative purposes.  This is not direct investing advice nor should it ever be taken as such.  Assumptions above are for case study purposes only.  If you have specific needs, please consider consulting a fee-only financial planner to discuss any major financial decisions.

Thanks again to Owen Winkelmolen, a fee-for-service financial planner (FPSC Level 1) and founder of PlanEasy.ca for his contributions to this post.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

78 Responses to "What is a LIRA and how should you invest in it?"

  1. Hi Mark, I am a Canadian citizen working and living in the US with a green card. I have a LIRA from my former Canadian employer that is now held at a bank in Canada. Given my US residency, I was told for many years that I was only able to use my LIRA funds to invest in a GIC. Now I am being told that I can no longer do that. My funds are currently in Cash earning very little. I am 62 years old and plan to retire in 5 years. Are there restrictions on how LIRAs can be invested if you are not a resident of Canada? Is there an option to transfer a LIRA to a IRA account in the US?

    1. Hi Rob,

      I am aware of the tax implications, generally, in moving any 401(k) to RRSP – see below – but I’m not familiar of the tax implications of trying to move LIRA funds, even if you can, to IRA.


      I do know for a fact, that Canadians can hold more than GICs, etc. in a LIRA. It must be a self-directed LIRA however. Those are available at most Canadian brokerages.

      Here is one example:

      You might want to consider consulting with a U.S. tax accountant specialist to go through your situation with you and help chart a course for account structure in pending retirement. They should be able to provide detailed, personal, tax advice.

      Thanks for reaching out!

  2. Hi Mark,

    So once a LIRA has been unlocked and converted to a LIF or RRSPs , can it be locked back up and re-established?

    Thx u

      1. Hi Mark,
        My bank advisor (TD) is telling me that if I unlock my LIRA to a LIF I have to convert all my US stocks back into Canadian. In other words. I have to sell the US currency held stock and place it back into my Canadian account. Do you know if this is true. I have searched high and low and see that we are allowed to hold US stock in an account. There is no clarity if it has to be in US or Canadian dollars. Please help.

        1. Hey Frank,

          I can’t offer advice, and I haven’t reserached what all the brokerages do or do not do, but potentially some brokerages don’t have USD-dollar LIFs.

          I recall TD HAS USD-dollar LIRAs so they should have USD-dollar LIFs.

          “When you retire, continue to invest your portfolio in the Canadian and US markets by converting your LRSP or LIRA into a self-directed income fund in Canada.”

          I would contact TD Direct Investing directly and ask them: do they/you have USD-dollar LIFs?

          The idea of “unlocking” some of your LIRA to RRSP and leaving the rest in your LIF seems smart to me Frank = start the min. income from LIF and put assets into RRSP for longer-term flexibility and tax-deferred compounding.

          Keep me posted! 🙂

          1. Thank you so much Mark, I will take you suggestions and I will keep you posted. Appreciate you getting back to me so quickly.


  3. Hi Mark. I have a LIRA in Ontario, and also a RRIF and an RRSP, all 3 with the same institution. You said:

    “In addition, depending on your province, you might be able to “unlock” 50% of your LIRA with no limits. Thankfully, Ontario has that regulation”,

    and then “Be mindful you have only 60 days to make any transfer after unlocking with your financial institution”.

    So how would that 60 days be applied to my situation Mark? I’m 65 years old, so if I “unlock” half, say 50K of my 100K LIRA , does the money stay unlocked in the LIRA until I ask my institution to transfer it to my RRSP or RRIF?

    Or am I required to set up a LIF, then transfer funds from my LIRA first, and THEN within these 60 days unlock up to half of the LIF to a tax deferred vehicle???


    1. Hey Stan,

      Thanks for your readership. I recall you will need to apply.

      “You are at least 55 years old and the total value of the funds in all of your locked-in accounts is less than 40% of the Year’s Maximum Pensionable Earnings (YMPE)”

      “The Year’s Maximum Pensionable Earnings (YMPE) is a dollar amount set each year in relation to the Canada Pension Plan. The YMPE determines the amount a person is eligible to withdraw or transfer from a locked-in account. A new YMPE is set every year. The YMPE for 2021 is $61,600.”

      Your financial institution should be able to help you out!

      If you can’t unlock all if it, then in Ontario, 50% can be unlocked one-time and go into the RRSP. The rest will be set-up as a LIF.

      Also, Contact the regulator of your pension plan to determine what you can do with your LIRA – don’t rely solely on information from your financial institution. In Ontario, that is these folks:

      Not tax advice of course!! 🙂

  4. What a timely post for me!

    In Alberta, I can unlock my LIRA based on financial hardship. I’m 60 and have been disabled and not earning taxable income for 2 years. I do, however, receive private insurance nontaxable benefits. CPP has not yet approved my long-term disability benefits application.

    My question is, what is the best strategy for unlocking? Minimal or maximum amounts (for which I’m taxed)? In Alberta, I have a choice of unlocking any minimal amount up to $33,000+/-. What is the best strategy? Should I unlock the maximum amount (in Alberta I can transfer into an RRSP and yes, I have room.) or should I withdraw minimal amounts? I have almost $100,000 in my LIRA

    Many thanks in advance. I have questioned Qtrade and Wealthsimple on this and neither has been able to advise.

    1. Great stuff Kate, re: article timing.

      I can’t offer any advice of course, totally DIY investor here and not a CPA or CA but….I can say, that with some clients and folks that I know, they have decided to unlock as much as they possibly can (when they can) and move assets into RRSP to the extent possible.

      The reasons for this (I assume??) is two-fold:

      1. Getting rid of any LIRA values = reduces account complexities with LIRAs to LIFs on top of RRSPs to RRIFs, TFSAs, CPP, OAS, etc. for any individual to manage. Therefore, the less accounts, the more consolidation occurs, the easier the tax and retirement draw down planning can be.
      2. LIRAs to LIFs are a one-way ticket I believe. Meaning, once all or some of the LIRA to LIF is established, you have to take the money out. With assets inside the RRSP, you can choose to set-up a one or more RRIFs – or simply take RRSP withdrawals as you need them vs. setting up a RRIF. You are only forced to “RRIF” in the year you turn age 71. Meaning, you don’t need a RRIF to take the money out an RRSP. You do however need to establish a LIF if you want your money out. So, more financial flexibility managing RRSP and RRIF assets or any combination.

      I can’t speak to the maximum or minimim amount you should unlock since that is a very personal decision based on your own needs.

      Since you live in Alberta, although they cannot offer any advice, the folks at the provincial pension level should be able to tell you what the rules are on unlocking for sure:

      I don’t think any discount brokerage will be able to provide any financial advice as well – so likely don’t count on Wealthsimple or Qtrade for that 🙂

      All the best with your decision Kate.

      1. Thanks, Mark, I appreciate your quick response!

        I tend to agree with unlocking as much as possible IF possible however the tax rate starts at 20% for unlocking $5,000 to $15,000 and after that the tax rate is 30%. Since I have no taxable income at this time I’m trying to make the best decision since I won’t be able to ‘write’ that tax off.

        I wonder if taking the maximum is worth paying the extra 10%…and having said that, I’m not sure there’s a ‘right’ answer. I invite everyone’s and anyone’s opinion on this.

        Thanks again, Mark.

        1. No problem of course Kate. You might want to check out this case study about $120,000 in a LIF. Could be relevant and given you have no taxable income at this time, might be the best time to unlock although talking to an accountant could be good too!


          “Some people may want to access locked-in funds because they need the money immediately. Others may just want to minimize the amount of money that is subject to maximum withdrawal restrictions. If your LIRA is small, unlocking a portion may mean the remainder is small enough, or will be in the future, to unlock it under the small balance limits for your province of residence.”

          re: small balance:
          I recall individuals 55 or over with LIF holdings of less than 50% of the Yearly Maximum Pensionable Earnings (YMPE, 50% = $27,450 in 2016) will be able to wind up their accounts with the option to convert to a tax-deferred savings vehicle, such as an RRSP or RRIF…

          1. Thanks again, Mark.

            To be on the safe, I’m contacting CRA because it’s the tax implications I’m worried about..

            Great blog! Very informative! Thanks!

              1. Thanks for the post Mark, very helpful information.

                Questions for you, I currently have an RRSP and a LIRA, 65 years old and still working.

                Eventually when I convert the RRSP to a RRIF and the LIRA to a LIF :
                – can they be merged into 1 account ? (either a RRIF or a LIF)
                – if not, the yearly minimum withdrawal amount (lets say 4% at 65) , is it 4% yearly against each
                account or 4% from one of them ?
                – if 4% from only one of them, is it up to me which one I draw from first ? and once I choose lets
                say LIF, I have to continue doing LIF until its depleted, then move on to next ?

                Thanks very much for any help you can give me

                1. Thanks Tom, nice to hear from you!

                  1. Can they be merged? I believe so, but really under special circumstances only I recall. I would need to confirm with the pension regulator though just to be sure.

                  2. Yearly mins. apply to RRIFs and LIFs as they apply to each account you own. The government wants money back in taxes deferred 🙂

                  3. You can turn on the RRIF or LIF at any age….but….it’s mandatory to convert from an RRSP to RRIF or LIRA to LIF in the year you turn 71. The RRIF income can occur in the following year. You must also turn your LIRA or locked-in RRSP into a LIF or life annuity no later than December 31 of the year in which you turn 71 years old.

                  Now, what one do you convert for income? Is one better or the other? I personally find a RRIF more flexible than a LIF. You might want to check out this post as well. “Unlocking” your LIRA is a good idea. 🙂

                  Happy to discuss further, not advice, just some ideas!

  5. Hi Mark, I am 55 and have a LIRA in Ontario but live in BC. When I retire at 60, if I want to transfer 50% of my LIRA to my RRSP can i do that only if I have that room left in my RRSP? I.E. if i want to tranfer $20,000, do i need to have a RRSP contribution limit of $20,000+.?
    I did first read the linked articles on Ontario LIRA rules, but I couldn’t find this info.
    Thanks – Melissa

    1. Hey Melissa,

      Not advice, but if now 55 and have a LIRA – for any “unlocking” rules check 1) with financial institution as well as 2) with the provincial legislation. For starters, I recall pensions/LIRAs are provincially and federally regulated and depends on the province the pension/LIRA exists but you might wish to fact-check on that.

      As for the transfer, you can only “unlock” 50% from Ontario but my understanding is you do not need RRSP contribution room to do so.
      Here is a reference that supports my assumption:

      “Individuals 55 or older will be entitled to a one-time conversion of up to 50% of holdings value into a tax-deferred savings vehicle with no maximum withdrawal limits. If the funds are transferred to the locked-in funds owner’s own RRSP or RRIF, this does not require contribution room, and the owner is not taxed until the funds are later withdrawn from the RRSP or RRIF.”

      Hope that helps your decision but do talk through any tax considerations with a fee-only financial advisor when in doubt.

      Thanks for being a fan,

  6. Why would a financial advisor place funds in a LIRA. The retired person just retired after 35 yrs. with a DB plan and has no pension assets from anywhere else. Am I missing something here as far as a investment strategy?

    1. Well, I had to choose a LIRA for my former DC pension since I couldn’t leave the money with my former employer. LIRA are not for everyone to your point Gerry!


  7. Unfortunately most of this is very new to me and I find myself in a position of having to move my pension into a LIRA, but I don’t have a clue what institution to do this with? I am worried about fees, penalties if I move it out by using the LIRA to buy service in my new pension plan within the next 6 months ( if that’s s good idea) etc. Any recommendation on what institution to use? A major bank? Questrade? Desjardin (my insurance agents suggestion) etc?

    1. Happy to provide more clarity or details Leigh. I could potentially use your questions for a blogpost. I can’t offer direct advice of course but I can help you consider some options. Feel free to email me via my Contact page. All the best.

      1. Hi my name is Tracey from Manitoba.
        Thanks so very much for your forum.
        I just turned 57.When I was 32,my spouse was 33. He died spraying round up to kill our weeds. He accidentally inhaled. In a corner by fence. Most rose up and in my opinion it wast a detriment. He was gone almost immediatly.
        I got his Pension 10k. Had to be a LIRA due to my age. I have had it with Mc Kenzie financial. It’s matured and needs to be transferred.
        Should I transfer it to a bank or an investment company? I live near Selkirk mb. It has doubled. But it’s been over 20 yrs I am a bit dissapointed. My advisor split the investments into 3.
        I do not feel I have adequate knowledge to know what to do and where. So I do need an advisor.
        I would like to take out say 6/8 k
        I need a vehicle badly.
        I also have The DTC tax status.I am just resubmitting a new one.
        I receive a combination Survivor and disability From CPP
        Any info that you can give me is very much appreciated.
        Thank You Tracey W

        1. Very sorry to hear of your loss Tracey.

          I can’t speak to your specific needs but my partner and I do have a service whereby we can crunch some projections. We cannot offer any advice on specific investments but we can offer what the financial math says based on your inputs. Hit us up with an email here if you wish:

          All the best and take care,

          1. https://www.gov.mb.ca/finance/pension/pdf/bulletin4.pdf

            The above would suggest she has a small balance for Manitoba re $20k. Based on DTC + basic exemption and the need for a car, wouldn’t it make sense Mark to suggest she go ahead w unlocking, take the $6-$8k she said she needs re car and put the rest into a rrsp and then take the rest over the next couple of years ($6k/yr), if she doesn’t need the cash, take it as an in kind transfer to a non registered and then on the same day transfer to a tfsa (no cap gain on the transfer)?

            Mark, also, a minor clarification your LIF table suggests access at age 50. In Ontario you can only actually access funds in the calendar year after you turn 55. (Ie. Convert to a LIF when you turn 55, convert 50% to a RRSP and then start drawing on the LIF the following January). Jim

            1. Great comments.

              First, very nuanced table. For MB, for example, LIF funds governed by Manitoba’s regulations may be withdrawn at any age to provide retirement income up to the maximum amount allowed by the LIF. The funds may not be withdrawn as a lump cash sum, at any age.


              So, based on the table, I would agree it’s somewhat misleading since depending on your province LIF withdrawal rules may or may not apply.

              As you might know, I live in Ontario, and yes, age 55 is the min. age and I can “unlock” 50% of my LIRA – which I intend to do.

              “Thankfully, here in Ontario where I live we have that feature in the regulation – a feature I intend to take advantage of myself!!”


              In the case study, I think the financial advisor at the time was thinking about/sharing asset location ideas and not just the timing feature of when to take LIRA > LIF income.

              Personally, I would take out any $$ not needed at age 55, get that LIF gone sooner than later, and move any money not needed for spending into the TFSA every year.

              Thoughts, Jim?

  8. Hi Mark… I love your simple to understand posts. What suggestions do you have for someone 63 yrs old with a small LIRA (less than$12k) from bankrupt Sears that is seeing it erode monthly from the fees charged by the trustee Sunlife?

    1. Thanks Tom. I strive to write clear, easy-to-read posts in plain language.

      Hummm, small LIRA eh? Depending on your investing goals of course I would consider a low-cost CDN ETF and use other products to invest abroad in your RRSP and TFSA for U.S. and international diversification. That would be my hunch. Welcome to reply to let Owen and I know more details.

      Not advice mind you just some things to think about!

  9. My biggest problem with my LIRA is that it holds 4 mutual funds at Manulife that mostly do OK but over the past two years I’ve gotten away from mutual funds due to the fees and I now DIY and buy ETFs. I’ve considered opening a LIRA at Questrade, transferring the mutual funds over, and investing in what I want. Lower MER, DRIP, and growth.

    What stops me? Risk factor. Aside from a couple of GICs, this is my low risk investment. The financial planner I had at the time invested in a program that guarantees my initial investment will always be intact if something bad happens and the funds head south. It can never go lower than my initial investment – I’m sure someone here more knowledgeable will know the technical name for this type of program.

    I thought maybe I can unload the two lowest performers and send them to a new LIRA I create at Questrade and buy ETFs, and leave the two better performing mutual funds where they are. My current financial planner who took those over when my first planner retired, says its an all or nothing plan. I can’t break up the initial investment and have the ones I leave with Manulife still getting that guarantee. That guarantee no longer applies if I break up the set so to speak. Does anyone know if that sounds like it could be true? I’d hate to think he’s lying to me, but I know financial investors aren’t looking out for the best interests of low income single women because they don’t make much commission from us. Right now I’m annoyed because one of the lagging mutual funds I sold in October and purchased another one that looks like a better plan for growth, isn’t showing on my year end statement. I can buy/sell from a limited selection of funds within the plan I have. And the financial advisor hasn’t gotten back to me. Not even as much as he’s looking into this for me. For all I know Manulife screwed up and didn’t complete the transaction, but the advisor should have still been on top of it and noticed it didn’t go through.

    It’s been 10 years in this LIRA.

    1. Hi Cheryl, I’m sorry to hear that your advisor isn’t getting back to you, it’s hard to say what the best course of action is without knowing what your advisor currently has you invested in, your goals, your risk tolerance etc. My advice would be to seek out an advice-only financial planner, someone who isn’t compensated through selling investments/insurance etc. It might cost you a little bit up front but you’re going to get much better service and advice. Here is a list of advice-only planners in Canada (you’ll find me there too).


      Most advice-only planners do a free discovery session. I always do a free discovery session with clients to make sure we’re a good fit, if you like we could do a discovery session together and talk about the specifics of your situation and see what options you may have. Just complete the discovery questionnaire and I’ll send you a link to book a meeting.


    2. Thanks for your detailed comment.

      Only you know what is best for you Cheryl but I suspect you can do better!

      Have you considered a meeting with your advisor? Forcing the issue a bit and talking about switching to lower-cost products/ETFs and moving your LIRA? I think that seems warranted. I would imagine any financial institution (e.g., Questrade although not just them) would LOVE to have more assets under management and could help you out.

      I suspect you might be into segregated funds although I can’t be sure.

      Overall, sounds like you have some motivation to change things and learn more about what you’re really invested in and why. That’s great and I encourage you to push on – we’ve all had to do that at some point and we all learn what’s better for us over time 🙂

  10. I have a LIRA with sunlife. $100K of equity funds split 50/50 US/CAN index. Unfortunately with Sunlife the MERs are still robbery. Does anyone know if I can open a self-directed LIRA at my Waterhouse brokerage and transfer the balance there from SL? I moved my Sunlife RRSP years ago to avoid the fees, now the LIRA needs the same. Mark

    1. I moved my LIRA from National Bank to TDDI. TDDI did all the work and it took time (quite a bit actually) but it did work. I didn’t have any proprietary products though. I have no knowledge about Sunlife products and how that might have issues (fees).

    2. Hi Mark, as Lloyd mentioned you can absolutely move your LIRA to another financial institution (and probably save yourself a couple thousand per year in mutual fund fees). Usually the institution you want to move the money to will help with the forms and manage the transfer. It’s ideal to transfer investments “in-kind” (meaning nothing gets sold/re-bought) to avoid being out of the market during the transfer. After the transfer is complete you can re-allocate your investments in the new account to less expensive options without any time out of the market.

    3. I’ll let Owen provide more details/examples from his experiences but I see no reason why you can’t move around LIRAs from one institution to another. Meaning, just like you can transfer a mutual fund RRSP account into a self-directed RRSP account to hold more than funds (stocks, bonds, GICs, etc.) you can do the same with a LIRA.

      I know for a fact a few investors who have a self-directed LIRA at TD Direct Investing, RBC Direct, BMO InvestorLine, etc.

      Talk to the institution you want to transfer to first, about your needs. They are usually MORE than happy to help, expedite transfer forms and if you ask them – waive any transfer fees. You don’t get what you don’t ask for (nicely of course)!

    4. I would love to self direct our funds, after a closure of a co. that my husb. was with for 27yrs , (this was 10 yrs ago) my sister, a fin. advisor took over our accts. in 10 yrs and from what ive read, it has been a good 10 yrs, we have not had the gain, as I see it now, that we should have. My sister passed away, and I have just learned of the fees, that have been charged as, we just rec’d our annual statements, with fee statement attached, I havent seen a fee statement in the last 10 yrs. Our funds are currently with an advisor, we know nothing about and I would like to learn how to self direct.
      LIRA s and RRSP s are what we have, approx 400k.

      1. Hi Kathy, there are some great resources out there to help transition to a DIY portfolio. Check out the Canada Couch Potato model portfolios. Often a DIY investor is their own worst enemy so my suggestion is to make a clear investment plan that includes how much you’ll contribute each month, what your target asset allocation is (and why) and also when you’ll rebalance your portfolio to get back to your target asset allocation (ideally at least 1/year and at the same time each year). Often DIY investors don’t follow their plan, or don’t have a plan at all, at this can lead them to lag the market returns by 0.3% to 1.5%+.

        1. Thank YOu Owen, it would not be my intention to add anything, I simply want the funds in there to grow, I have been considering taking funds from LIRA, or managing them, with TD Drips, just not sure where to start

  11. Self directed my small lira like my RRSP years ago. More then tripled in value, in time. Switched over to lif, from which I take out about 4% per year. So far, has no decrease in value, and pays for electricity and more!

    1. Well done Paul. I think for some investors, a self-directed LIRA is the way to go as long as they understand how that LIRA fits into their plan and select products to go with that plan.

      I hope to have ENB dividends pay for my natural gas bill for life in the coming years 🙂

      1. Paul, self direct is where I want to go with my LIRA , MER from investments this year is $1300. so that s enough. Maybe you can help me, I need to know how to self direct

  12. Good primer and good points by both of you in the case study.

    I was in a company DC pension plan for a number of years that I rolled into a LIRA when I left their employ about 15 years ago. It is a provincial plan not eligible for unlocking up to 50%. A year ago I converted this to LIF to begin minimum withdrawals in my late 50’s. I established this because I had been withdrawing many times this amount from my RRSP the previous 3 years and likely will continue to do so, and I knew this minimum amount was a sure thing I would want and need to keep. Now my RRSP withdrawal is a little less.

    I consider all of our investment assets as one portfolio in context of allocations. My LIF is approx 90% fixed income now (GICs & corp bonds), while my much larger RRSP is mostly equity. With my LIF I have been wthdrawing CDN equities in kind to my unregistered plus a little cash, and requested a basic amount of withholding tax even though minimum withdrawals doesn’t require it. This keeps me out of installment territory that I want to avoid.

    1. I think it’s very smart to consider all of your investment assets as one portfolio in context of allocations….it makes it more challenging for sure to ensure certain assets are in the right spot, in different amounts, but it can be more tax-efficient this way.

      I intend to do something similar: around age 55 (when I can in Ontario); withdraw money to spend and/or use to build up my TFSA every year thanks to TFSA contribution room. Time will tell! Thanks for your insights as always.

      1. Thanks. For a balanced investor this is the only way to fly. Trying to keep the same allocation account by account is possible but much more difficult and potentially very tax inefficient. In the withdrawal phase it certainly takes some thinking and a little crunching of numbers to keep the desired balance, along with staying tax efficient.

        Seems like a good idea for you to get moving on that account to draw down registered in early retirement and feed the TFSA. For some people this is a good strategy. As you know I’m doing this feeding as well.

        1. I love the idea of drawing down RRSPs/LIFs faster than necessary and using that extra money to maximize TFSA contribution room each year. This is especially useful if you can stay within the same tax bracket. It makes the money more accessible and minimizes the tax bill on your final estate.

          1. Absolutely Owen. I can say its a little challenging though to accept paying a little more tax than you “have” to, but in the long game it’s definitely right for us.

            I had a relatively high tax rate in all my working RRSP contribution years (age 22-47) and now am at a lower bracket. So that works well on net benefit of RRSP as I had hoped (so far), and then taking this lower taxed money and reinvesting 1. TFSAs 2. unregistered (when possible) makes sense to me, at least for another 5-10 years, when govt benefits may start and a little later RRIF mandated.

  13. At 54, I would still like to invest in ETF’s, but which ones? $250,000 available, the rest 400k is in individual stocks. Could someone recommend? Kids are 25 and 23 – which ETF’s should they be looking at?

    1. Hey Joe,

      I can’t offer direct advice but I think if you like ETFs, you can check out my ETFs page that identifies many low-cost, growers and income-oriented funds to start your research.

      I think for young adults, you can also consider some all-in-one funds for them. Nothing really to worry about except add money over time – just contribute and let the ETF in terms of rebalancing, asset allocation, etc. do the work for them.

      Check out my Deals page – I have promo codes to invest with BMO (no obligation of course) but it’s an option for you to consider.

  14. Mark/Owen,

    Can you give more details on the 50% conversion of the LIRA to RRSP? Is this only a onetime decision and only at time of conversion to LIF or can you convert 50% before you convert to LIF? My wife has a LIRA and based out of Ontario. Thanks

    1. Hi Charlie, this is a one time decision and must happen within 60-days of converting to a LIF. The conversion to a LIF will also trigger annual minimum withdrawals so that is something to be considered, especially for anyone who is lower income and qualifies for GIS benefits or other income tested benefits. Here are some additional details…


  15. Taking my commuted value and putting it in a LIRA could turn out to be the single largest financial blunder I made. I did get a professional opinion but I/we failed to consider one important factor and that skewed the whole analysis. It may work positive in the end, but unfortunately it would require me to die. But that is water under the bridge.

    1. Hindsight is always 20/20 Lloyd – we’ve all made mistakes and we don’t learn unless we make a few. You’ve done very well overall. What are your thoughts on this case study as a DIY investor? Thoughts on how to manage the LIRA?

      1. The managing of the assets should fit into an overall financial plan. I can’t really add much other than to re-iterate what you and Owen have already stated, a LIRA should not be considered an isolated asset.

        On a personal note, I have my LIRA invested in 100% equities but I have a substantial GIC holding in my and DW’s RRSP. And as you know, we both have modest DB pensions indexed to inflation. It stands to reason that my situation is undoubtedly different than others. If I had to give some advice that would be universal in nature, it is to get a professional, *unbiased* opinion on the more complicated issues and go from there.

    2. Whether or not to take a commuted value is a very tough decision, so many different factors to consider, many of which have nothing to do with “the math” but instead with a persons feelings/goals/risk tolerance etc. If you don’t mind sharing Lloyd, I would love to know what your important factor was. Might be valuable for others making the same decision.

      1. Background: The federal government “sold” the air traffic system to NavCanada in ’96. We had the options of leaving the pension with the feds, transferring to the NavCanada pension plan, or taking the commuted value. We failed to take into consideration that had I taken the pension assets with me into NavCanada, any salary increases over the remainder of my career would be applied to those transferred pension credits. On paper, all I had to achieve in a LIRA was around a 7% return to be roughly equal to leaving it with the feds. In my neophyte mind I figured a 7% rate was doable and the benefit of a 100% death payout in a LIRA versus a 50% survivor pension sold me on it. Not paying much, much closer attention to the benefits of transferring was my downfall. Huge mistake.

        1. We’ve all had some regrets somewhere on financial/investment decisions. The main thing is you seem to be in a very good place (understatement) retirement wise.

          1. I don’t go to sleep every night kicking myself. It happened, there is nothing I can do about it. I made a mistake by basing a decision without *all* the facts, or maybe a better description is not realizing the ramifications of all the facts. In the big picture in my life (I know you understand RB) it isn’t really that big a of a deal. Suffice to say, it is easy to screw up sometimes and I’m good at it. 😉

          2. “Suffice to say, it is easy to screw up sometimes and I’m good at it. ?”

            Trust me. Ditto here. But I’m a forward looking guy and yes in whole the scheme of things….whatever.

  16. Not sure I agree with the LIRA/fixed income approach. Here is one scenario:

    1. The economy tanks.
    2. Recession, you lose your job
    3. Shares tank too
    4. Interest rates go to 0
    5. Value of bonds goes up
    6. You need the money to be withdrawn from the portfolio to get you over the hump.

    Under this scenario you are forced to deplete your TFSA or non-reg share-rich portfolio at the oust time possible.

    The point worth a mention is that dividends from US shares are not taxed in RRSP/LIRA. Preferential placement of such stocks into LIRA gives the overall portfolio better return.

    1. Great counterpoint. I would consider the Vanguard or iShares all-in-one funds myself since I think they offer simplicity and growth over time as you are forced to deplete the LIRA with withdrawals at some point.

      I believe Owen was looking at the LIRA as part of a fixed-income approach so you could invest more aggressively elsewhere.

      From a personal perspective Mordko – I also keep a U.S. listed ETF in my LIRA for the exact reason you mention.

      Do you have this account? Curious. Thanks for being a fan.

        1. Gotcha. Are you/your wife investing in mostly equities via your LIRA? I know I am. Just a personal decision vs. fixed-income but I’m OK with volatility short-term. I know I will come out ahead of bonds in another 10 years – at least I hope so 🙂

    2. Hi Mordko, thanks for your comment. Using the LIRA in this way needs to be part of an overall portfolio strategy including RRSP and TFSA, the LIRA shouldn’t be treated in isolation.

      In the situation you described the client would rebalance between their entire portfolio, LIRA, RRSP and TFSA, to maintain their overall target asset allocation. Equities could be sold in their TFSA/RRSP to provide access to funds and at the same time bonds would be sold in the LIRA and then the same equities would be purchased. After selling and buying the overall asset allocation will remain the same, so essentially bonds were sold to fund the short-term income needs.

      1. Owen,

        Thanks. I understand this – and my portfolio is structured to ensure target asset allocation and rebalancing across accounts.

        It’s just if you lost 50% in your accessible accounts during a downturn, a chunk of your safety cushion is gone.

        1. The one bright spot in a terrible situation like the one you described is that financial hardship rules can kick in and allow you to unlock some of those locked-in investments. Low-income years, paying first/last months rent, medical expenses etc all qualify for financial hardship unlocking. So if during a downturn someone finds themselves out of work and needing to access those locked-in investments, it is possible.


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