If you have pension savings or multiple types of registered retirement accounts, understanding the differences between LIFs, LIRAs, and RRIFs is essential for planning your retirement income. Here is how each account works.
This page is the comparison hub for the locked-in branch, so it pairs naturally with the LIRA guide, the Life Income Fund guide, and what to do with money after retirement in Canada. If you are deciding which account matters in your own plan, also compare it with difference between RRIF and LIF in Canada and retirement income strategies in Canada.
Quick comparison
| Feature | RRSP / RRIF | LIRA / LIF | Pension |
|---|---|---|---|
| Source of funds | Personal savings | Locked-in pension money | Employer pension plan |
| Savings phase | RRSP | LIRA | Active pension membership |
| Income phase | RRIF | LIF | Pension payments |
| Minimum withdrawal | Yes (RRIF) | Yes (LIF) | N/A (set by pension) |
| Maximum withdrawal | No limit (RRIF) | Yes (LIF) | N/A |
| Conversion deadline | Age 71 | Age 71 | Retirement date |
| Can transfer to | RRIF, annuity | LIF, annuity | LIRA (if leaving employer) |
RRIF (Registered Retirement Income Fund)
A RRIF is the income-phase version of an RRSP. You must convert your RRSP to a RRIF by December 31 of the year you turn 71.
Key features
- Minimum annual withdrawal — Increases each year (starting at 5.28% at age 72)
- No maximum withdrawal — You can take out as much as you want (it is all taxable)
- Investment flexibility — You can hold the same investments as in your RRSP
- Withholding tax — Amounts above the minimum are subject to withholding tax at source
RRIF minimum withdrawal rates
| Age | Minimum (%) | On $500,000 |
|---|---|---|
| 72 | 5.28% | $26,400 |
| 75 | 5.82% | $29,100 |
| 80 | 6.82% | $34,100 |
| 85 | 8.51% | $42,550 |
| 90 | 11.92% | $59,600 |
Use our RRIF calculator to model your withdrawal schedule.
LIRA (Locked-In Retirement Account)
A LIRA holds pension money that has been transferred out of an employer pension plan, typically when you leave a job.
Key features
- Locked in — You cannot make withdrawals (with limited exceptions)
- No contributions — You cannot add money to a LIRA; it only receives transfers from pensions
- Investment flexibility — Same as an RRSP; you manage the investments
- Must convert by age 71 — Transfer to a LIF or purchase an annuity
When you might have a LIRA
- You left a job that had a defined benefit or defined contribution pension
- Your employer pension plan was wound up
- You and your spouse divided pension assets in a separation
LIF (Life Income Fund)
A LIF is the income-phase version of a LIRA. It works like a RRIF but with one critical difference: there is a maximum annual withdrawal, not just a minimum.
Key features
- Minimum annual withdrawal — Same percentages as a RRIF
- Maximum annual withdrawal — Capped each year (varies by jurisdiction)
- Provincial jurisdiction — LIF rules depend on which province’s pension legislation governs your pension
- Investment flexibility — Same as RRIF
LIF maximum withdrawal
The maximum withdrawal varies by province and is designed to prevent you from draining the account too quickly. Typical maximums are based on the greater of: the investment return earned in the prior year, or a percentage calculated using CANSIM rates.
| Province | Maximum Rule (Simplified) |
|---|---|
| Federal | Greater of: prior year return or prescribed formula |
| Ontario | Greater of: prior year return or prescribed formula |
| Alberta | No maximum after age 50 (can unlock) |
| BC | Greater of: prior year return or prescribed formula |
| Quebec | Temporary income calculation based on life expectancy |
Choosing between LIF and annuity
When converting a LIRA, you have two options:
| Option | LIF | Life Annuity |
|---|---|---|
| Control over investments | Yes | No |
| Guaranteed income for life | No | Yes |
| Flexibility | Moderate (within min/max) | None |
| Inflation protection | Only if investments grow | Only if indexed (costs more) |
| Remaining balance at death | Goes to beneficiary | Usually stops (unless joint) |
| Risk | Investment risk is yours | Insurance company bears risk |
A LIF is usually better if you are comfortable managing investments and want flexibility. An annuity provides certainty and is better for those who want guaranteed income without investment decisions.
Unlocking LIRA funds
In some circumstances, you can unlock all or part of your LIRA:
- Small balance — If the balance is below a threshold (varies by province), you can transfer to an RRSP or withdraw
- Shortened life expectancy — Medical documentation may allow full unlocking
- Financial hardship — Some jurisdictions allow partial unlocking for hardship
- Non-residency — Leaving Canada may allow unlocking
- Age-based unlocking — Some provinces (like Alberta and Saskatchewan) allow unlocking at age 50+
Rules vary significantly by province. Check your specific provincial pension legislation.
Bottom line
- RRSP → RRIF: Your personal retirement savings. No maximum withdrawal.
- LIRA → LIF: Your locked-in pension money. Maximum withdrawal applies.
- Both must be converted by age 71.
- The key difference is that LIF funds are restricted — you cannot access the money as freely as RRIF funds.
Use our retirement calculator to plan how RRIF, LIF, CPP, and OAS income combine to fund your retirement.