Life Income Fund (LIF)

You’ve saved for retirement through your workplace plan for years. If you’re planning to retire soon, you may need to consider your options for converting money from your pension plan or locked-in retirement account into an income stream to meet your needs now and in retirement. With a Life Income Fund (LIF), draw an income, grow your investments tax-free and pay tax only on the money you withdraw.  The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that supports retirement income for their lifetime. Every year Income Tax Act specifies the minimum and maximum withdrawal amounts for LIF owners, which takes into consideration the LIF fund balance and the owner’s annuity factor.


  • LIF owners are not required to purchase a life annuity but may choose to do so at any age based on the annual statement, the LIF owner must specify at the beginning of each fiscal year the amount of income he/she would like to withdraw.
  • If permitted, you can leave your pension benefits with your pension plan and receive a pension upon reaching pension age.
  • If permitted, transfer your accumulated pension benefits to another employer’s registered pension plan.
  • Transfer your accumulated pension benefits to a locked-in savings account, such as a provincially regulated Locked-In Retirement Account (LIRA) or a federally regulated Locked-In Retirement Savings Account (LRSP).
  • Use your accumulated pension benefits to purchase a deferred or immediate income annuity.
  • Transfer your accumulated pension benefit into a locked-in income account, such as a provincially or federally regulated LIF.

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