Life Income Fund (LIF)

What's a Life Income Fund?

LIF is a type of registered retirement income fund (RRIF) designed to pay you income from your locked-in pension assets.

What is it for?

Use it when you have pension funds from previous employers or workplace pension plans and need to access your savings after retirement.

How it works?

Once you retire, you can transfer your pension savings into a LIF and start withdrawing money, but there are limits to how much you can take out each year, based on your age and the size of the account. LIFs keep your funds invested and tax-deferred, allowing you to withdraw based on the required minimums and maximums.

Get to know the LIF

For whom

For Canadians aged 55 or older

Withdrawal

You must withdraw a certain amount each year, based on your age

Withdrawal

You can withdraw any amount between the minimum and maximum

Tax

Savings are tax-deferred until withdrawn

Growth

Funds can remain invested while generating income

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Featured rates

Term	Interest rate
Savings	0.60%
1 year	3.05%
2 years	3.15%
3 years	3.15%
4 years	3.15%
5 years	3.30%

Download all rates in PDF

Compare LIF and RRIF

	Life Income Fund	Registered Retirement Income Fund
Source of funds	Usually created by converting a LIRA, locked-in RRSP, or pension plan	Usually created by converting an RRSP
Annual withdrawals	Minimum requirements and maximum limits based on age and balance	There is a minimum requirement, but no maximum limit
Investment options	Mutual funds, stocks, bonds, GICs	Mutual funds, stocks, bonds, GICs
Age requirement	Must convert by age 71	Must convert by age 71
Fund access	Limited access	Limited access
Flexibility	Less flexible	More flexible

Criteria to be eligible for a Life
Income Fund (LIF)

Age

You must be at least 55 years old to transfer money from a Locked-in Retirement Account (LIRA) to a LIF.

Consent

If you have a spouse, you must obtain their consent before setting up the Life Income Fund.

LIRA presence

You must have a LIRA and transfer the money from your LIRA to your LIF by December 31 of the year you turn 71.

Withdrawals

You must adhere to the minimum and maximum withdrawal requirements.

Payments

You must begin receiving payments from your LIF in the year after you turn 71.

Tax

Withdrawals are considered income and are fully taxable at your marginal tax rate.

Simple process,
guaranteed returns

Please note!

Each application is unique with it’s own circumstances. For your individual case we advise you to speak to our Financial Services Officers

Plan the process ahead

It’s best to start the process a few years before you turn 55 to explore your options and avoid rushing last-minute decisions.

Schedule an appointment

Meet with a financial advisor to discuss LIF options, tax impacts, and other retirement income strategies.

Submit your documents

To apply for RRIF, you’ll need:

Photo ID (e.g., driver’s license) and Social Insurance Number
Your credit history and credit rating (from Equifax or TransUnion)
Proof of enrollment in a full-time program (such as an acceptance letter or current student ID).
Information on your assets and debts, including any investments, loans, and credit card balances

Keep your plan updated

Regularly review your investment strategy and withdrawal plan to ensure your retirement income stays on track.

Please note!

Each application is unique with it’s own circumstances. For your individual case we advise you to speak to our Financial Services Officers

Plan your retirement
with an LIF from BCU

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Questions? We got answers!

Browse more FAQs

What is the difference between LIF and RRIF?

A LIF (Life Income Fund) and a RRIF (Registered Retirement Income Fund) are both retirement income options, but they differ in how they are funded and the rules surrounding withdrawals. A LIF is generally used for pension funds transferred from a locked-in pension plan, such as a defined benefit pension. A RRIF, on the other hand, is typically used for funds accumulated in an RRSP (Registered Retirement Savings Plan) and allows more flexible withdrawals, although both have required minimum annual withdrawals based on your age.

Can I convert my LIF to a RRIF?

Yes, it is possible to convert your LIF (Life Income Fund) into a RRIF (Registered Retirement Income Fund), provided you meet certain conditions. This may be beneficial if you want more flexible withdrawal options or if you no longer need to adhere to the specific rules governing LIFs. Keep in mind that there could be different tax implications depending on the conversion and your specific situation.

Are LIF withdrawals taxed?

Yes, withdrawals from a LIF (Life Income Fund) are subject to taxation. The amounts you withdraw are treated as taxable income and are taxed at your personal income tax rate. Keep in mind that withholding taxes will be deducted at the time of withdrawal, and the final tax amount will be determined when you file your taxes.

How is my LIF balance invested?

Your LIF (Life Income Fund) balance is typically invested in a range of options based on your preferences and risk tolerance. You can choose from various investment products such as stocks, bonds, mutual funds, or other investment vehicles. The returns on your LIF will depend on the performance of these investments, and it’s important to review your portfolio regularly to ensure it aligns with your retirement goals.

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