# LIRA/LIF question



## gibor365 (Apr 1, 2011)

As far as I know , LIRA can be converted to LIF at age 55 or later... Question if this age can be counted as per spouse's age (like it can be done for RRIF)?
Also, I've read that after conversion to LIF, within 90 days, 50% of LIF can be converted to RRIF or RRSP.... Is anyone done it?


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## heyjude (May 16, 2009)

Not yet, but I'm planning to. The details vary depending on the province. Tax will be withheld.


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## gibor365 (Apr 1, 2011)

No any tax should be withheld if you transfer 50% of New LIF to RRSP or RRIF


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## livewell (Dec 1, 2013)

Don't know the answer to first part. I converted a LIRA to LIF at age 55 and unlocked 50% by moving assets in-kind into my RRSP. This is in Ontario, the unlocking provision does vary by province. The remaining LIF is the same as a RRIF except you have minimum and maximum allowable withdrawals each year. I am planning to withdraw maximum and partially melt down the LIF prior to 71.


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## avrex (Nov 14, 2010)

I wrote this article.
Locked-in Retirement Accounts – A Road Map

*1. Age*
Money cannot be removed from a LIRA/LRSP account, until the minimum retirement age is reached. Once that age has been reached, money can be moved to an account (i.e. LIF, LRIF) that allows for regular income withdrawls. The minimum retirement age varies by provincial legislation. For example, in Ontario the minimum age is 55 (or possibly earlier if allowed by the originating RPP).

*2. Unlocking*
Some provinces allow for the “unlocking” of a portion of these locked-in accounts.
For example, 50% of the funds are allowed to be unlocked in: Ontario, Alberta, Manitoba, and federal based pensions. There is also a timing issue to consider, when unlocking. In Ontario, after you create a LIF, you have *only 60 days* to perform this unlock process.


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## gibor365 (Apr 1, 2011)

> in Ontario the minimum age is 55


 the question is when I will be 55 , my wife will be 47... can she unlock her LIRA based on my age?



> 50% of the funds are allowed to be unlocked in: Ontario


 except those 50%, you can unlock LIF if it has "small " amount (I think something around 21K)...so if you have LIF 40K, you can first unlock 50% and than unlock rest as rest will be ledd than 21K


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## avrex (Nov 14, 2010)

gibor said:


> the question is when I will be 55 , my wife will be 47... can she unlock her LIRA based on my age?


I have never heard of this been done before. My guess is that the government wouldn't allow it.



gibor said:


> you can unlock LIF if it has "small " amount (I think something around 21K)...so if you have LIF 40K, you can first unlock 50% and than unlock rest as rest will be ledd than 21K


Correct.


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## Eclectic12 (Oct 20, 2010)

livewell said:


> Don't know the answer to first part. I converted a LIRA to LIF at age 55 and unlocked 50% by moving assets in-kind into my RRSP. This is in Ontario, the unlocking provision does vary by province...


I did get asked at one point if my LIRA was under provincial or federal legislation. It makes me wonder if it had been federal, would that have meant a federal set of rules for unlocking?


It didn't matter to me as it was under the Ontario rules as it was an Ontario company.


Cheers


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## Eclectic12 (Oct 20, 2010)

avrex said:


> gibor said:
> 
> 
> > the question is when I will be 55 , my wife will be 47... can she unlock her LIRA based on my age?
> ...


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## gibor365 (Apr 1, 2011)

avrex said:


> I have never heard of this been done before. My guess is that the government wouldn't allow it.
> 
> 
> .


 I googled this topic , but couldn't find any info....probably you are right, even though I thought that it can be similar to RRIF (possibility to get minimum based on spouse age)...
avrex, also wanted to confirm about taxation..... from my understanding if I unlock 50% and transfer to RRSP , I suppose to pay taxes on transfer out, but will get contribution receipt for RRSP, so practically - no taxes will be paid... but if I transfer this 50% into RRIF...how it will work?


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## avrex (Nov 14, 2010)

gibor said:


> avrex, also wanted to confirm about taxation..... from my understanding if I unlock 50% and transfer to RRSP , I suppose to pay taxes on transfer out, but will get contribution receipt for RRSP, so practically - no taxes will be paid... but if I transfer this 50% into RRIF...how it will work?


I believe there are no tax slips issued (and therefore no taxes), since the transfer is ultimately between two 'Savings Plans'. 
i.e. from a LIRA --> LIF (60 days) --> RRSP

Note: This is for Ontario.


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## livewell (Dec 1, 2013)

avrex said:


> I believe there are no tax slips issued (and therefore no taxes), since the transfer is ultimately between two 'Savings Plans'.
> i.e. from a LIRA --> LIF (60 days) --> RRSP
> 
> Note: This is for Ontario.


For the record having done this, there are tax slips issued, the 50% unlocked shows up as taxable income on a T4RIF and it is offset by an RRSP contribution slip. Net result is you do not pay tax on the 50% un-locking (Its a bit confusing at first, but what isn't with our tax system!!)

btw: you can do this at any time in the year you turn 55 (In Ontario)


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## My Own Advisor (Sep 24, 2012)

So you can unlock (up to) 50% of LIRA at age 55 in Ontario and then you must move rest into a LIF for the other 50%, correct? They LIF minimum and maximum withdrawals can start...

I could see tax slips being issued for because it's taxable income coming out of LIRA if not moved to another registered, tax-deferred account.

@gibor, did you check the FSCO pages for Ontario?
https://www.fsco.gov.on.ca/en/pensions/lockedin/Pages/nonhardshipunlocking.aspx

@Avrex, nice flowchart!


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## Eclectic12 (Oct 20, 2010)

My Own Advisor said:


> livewell said:
> 
> 
> > For the record having done this, there are tax slips issued, the 50% unlocked shows up as taxable income on a T4RIF and it is offset by an RRSP contribution slip.
> ...


I'm not sure why the tax slips would be needed. 

If the LIRA unlocked 50% transfer to an RRSP is "taxable income", what was different about the pension to LIRA transfer that it wasn't? They seem the same so I would have thought the same paperwork would work ... but that's me.


Cheers


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## gibor365 (Apr 1, 2011)

My Own Advisor said:


> So you can unlock (up to) 50% of LIRA at age 55 in Ontario and then you must move rest into a LIF for the other 50%, correct? They LIF minimum and maximum withdrawals can start...


Yes. Than you can withdraw maximums until your market value reach $21,440 , fill out Form 5 and unlock everything.... 
For my small LIRA it should work very fast  for my wife's big one will take some time....



> I'm not sure why the tax slips would be needed.


 because our CRA beloved government workers should pretend they are doing something


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