Financial Planning -> Pensions -> Registered Pension Plans (RPPs) -> LIF and LRIF minimum and maximum withdrawals
LIF and LRIF Minimum and Maximum Withdrawals
Life income funds (LIFs) and locked-in retirement income funds (LRIFs) are subject to minimum withdrawals under the Income Tax Act (ITA). The ITA treats LIFs and LRIFs the same as registered retirement income funds (RRIFs). See the article on our RRSP/RRIF page for the factors used to calculate minimum withdrawals. There is no withdrawal required in the year the LIF or LRIF is started.
Use our RRSP/RRIF Withdrawal Calculator to calculate minimum withdrawals. The calculator will not calculate maximum withdrawals for locked-in accounts.
LIFs and LRIFs have maximum annual amounts that may be withdrawn. The maximum amounts are regulated by federal or provincial pension legislation (not the Income Tax Act), depending on the plan from which the LIRA originated. The maximum for provincially regulated LIFs and LRIFs is usually the greater of:
See the last page of the BMO Wealth Management Locked-In Retirement Plans (pdf) document for an indication of which provinces have the option of using the investment gains from the account in the previous calendar year.
If your LIF or LRIF is federally regulated, the percentages in the table from the website of the Office of the Superintendent of Financial Institutions (OSFI) can be used to determine the maximum annual withdrawal for the year. From that OSFI page, select #2 - Life Income Fund and Variable Benefit Payable from a Defined Contribution Plan – Maximum Annual Payment Amount. The percentages in the table change each year, as they are determined by reference to the CANSIM B14013 rate in effect during the previous month of November.
The maximum withdrawal is really not much higher than the minimum withdrawal at first, so you may find that your locked-in fund grows each year even if you are taking out the maximum amount each year.
For provincially regulated funds, follow the links in the table of RPP regulators to find information on how your maximum withdrawal is calculated.
Revised: December 28, 2018
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