Ontario LIF Unlock 50%

 

Ontario LIF - Unlock 50%

LIF Withdrawals

• Subject to maximum withdrawal limits governed by the pension legislation of your plan
• At age 55 (or earlier if permitted) convert your Ontario LIRA to a New Ontario LIF and subsequently unlock up to 50% of the LIF by transferring assets into a RRSP or RRIF
• This one-time opportunity must be done within 60-days of the conversion

Examples

• Immediate Access to Funds - If you need access to funds, you can withdraw up to 50% of the LIF account within 60-days of the conversion. Amounts withdrawn are taxed as income
• Future Access to Funds – Transferring up to 50% of your LIF to a RRSP or RRIF gives you flexibility for future withdraws since the RRSP and RRIF accounts are not subject to maximum withdrawal limits

Implications of Conversion

• Could lose creditor protection of the unlocked assets, by the Pension Benefits Act
• May need spousal consent to unlock the assets
• Mandatory minimum payments from the new LIF begin the following year