Investing

Need help with LIRA Transfers

  • Last Updated:
  • Jul 27th, 2018 11:17 am
[OP]
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Jan 20, 2009
1792 posts
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Toronto

Need help with LIRA Transfers

Lira Ontario:


Example...
Are you able to transfer 30% of a LIRA into a LIF and then transfer/unlock 50% of the LIF?

I need a solid answer. I'm desperate for a solid answer from a LIRA expert or someone! I've been getting mixed answers from a lot of people.

EDIT***

Are you able to transfer ANY amount of a LIRA into a LIF and then transfer/unlock 50% of the LIF?
Last edited by n3o321 on Oct 12th, 2020 12:01 am, edited 3 times in total.
15 replies
Deal Fanatic
Feb 15, 2006
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Toronto
n3o321 wrote: Lira Ontario:

Example...
Are you able to transfer 30% of a LIRA into a LIF and then transfer/unlock 50% of the LIF?

I need a solid answer. I'm desperate for a solid answer from a LIRA expert or someone! I've been getting mixed answers from a lot of people.
What does your accountant say?

It depends on what kind of LIRA it is, where it is registered, your age, what you had done with the LIRA so far, etc. You want solid answers, you need to provide solid info. And ask your accountant, don't depend on answers from strangers in RFD including me.
[OP]
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Jan 20, 2009
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thanks for the snarky answer. i really appreciate you.

I mentioned it was an Ontario LIRA.

That is all the information needed to for an answer.
Accountants have nothing to do with this.

I just need to know if my scenario is able to be done.
this is a shot in the dark. BTW CRA has nothing much on LIRAs

If anyone can answer, please do!
Deal Addict
Oct 7, 2011
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Arrgh provided good answers to you. You still don't want to provide pertinent info and then provide snarky remark. You then say accountants have nothing to do with this, which just shows your ignorance of the matter.

Usually when people ask for help, they don't shove help away.
[OP]
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Cavegirl wrote: Arrgh provided good answers to you. You still don't want to provide pertinent info and then provide snarky remark. You then say accountants have nothing to do with this, which just shows your ignorance of the matter.

Usually when people ask for help, they don't shove help away.
How was his answer in anyway helpful or good?
How was your answer in anyway helpful or good?

What do accountants have to do with a LIRA transfer? EILI5? (explain to me like i'm 5)

What 'pertinent info' does Arrgh/you need? so far it seems like you guys just want to post for the sake of posting but don't really provide any real questions for me to answer.

I'm not shoving help away. im clearly looking for concrete answers.
if you have questions, ask me a question so then i can answer.

what is "pertinent info" for a LIRA transfer beside the legislation?
this is a transfer scenario, age is not a concern because I am only able to unlock a LIRA if the government approves of the documents I submit.
provided i have all the documents ready and age is 65 or 71...

so once again, it's a simple question;
Are you able to transfer 30% (any amount - up to my discretion) of a LIRA into a LIF and then transfer/unlock 50% of the LIF?
Deal Addict
Oct 7, 2011
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Accountants knows those tax and finance rules better than you.

Get educated, and read. What is your age, what did you do to this LIRA before, etc. You said it's Ontario LIRA, are you sure it's registered in Ontario, or the company has an office in Ontario but could be registered elsewhere? Age 65 or 71, or 55 is important, which you still don't want to answer (asked by Arrgh in the first response).

You said to explain to you like you are 5. Hope your mom taught you to say please, politely, when you ask for help. And say thank you politely when others helped you.
Last edited by Cavegirl on Jul 26th, 2018 3:45 pm, edited 1 time in total.
[OP]
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Jan 20, 2009
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Cavegirl wrote: Accounts knows those tax and finance rules better than you.

Get educated, and read. What is your age, what did you do to this LIRA before, etc. You said it's Ontario LIRA, are you sure it's registered in Ontario, or the company has an office in Ontario but could be registered elsewhere? Age 65 or 71, or 55 is important, which you still don't want to answer (asked by Arrgh in the first response).

You said to explain to you like you are 5. Hope your mom taught you to say please, politely, when you ask for help. And say thank you politely when others helped you.
Are you an accountant?
can you help me answer the question that i have? im asking on RFD like i said... a shot in the dark.

Get educated? read? lol im going to just brush off that comment.

I'm not looking for Tax advice or Finance advice...
Why do you need to keep questioning that the legislation for the LIRA is not Ontario? Legislation is Ontario. Not a federal or any other province.
how is age important? like i said, it's a transfer scenario. I'm not looking for requirements of unlocking a LIRA/LIF which is what you keep trying to insinuate.


ELI5 is a slang/reddit slang. You DON'T have to explain if you don't want to. You have a choice. I'm not forcing you to explain anything.

I will thank the person if they can direct me or give me an answer.
it's like saying thank you to a person when you start a conversation. Do you ever do that?
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Feb 1, 2012
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I don't know the answer... I have 2 LIRAs (One Ontario and one federal). Reliable information is frustratingly hard to find.

However your proposal sounds unlikely. What's to stop anyone from transferring part of a LIRA into a LIF, then unlocking it? It would defeat the purpose of LIRAs and LIFs which is to ensure people that take the commuted value of a pension get life income from it, rather than blowing it. (Not at all suggesting that is what you are trying to do.)

FSCO regulates pensions in Ontario, so might be a good place to ask.
http://www.fsco.gov.on.ca/en/pensions/f ... fault.aspx
http://www.fsco.gov.on.ca/en/pensions/f ... -Nov07.pdf
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Sr. Member
Jan 15, 2015
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n3o321 wrote: thanks for the snarky answer. i really appreciate you.

I mentioned it was an Ontario LIRA.

That is all the information needed to for an answer.
Accountants have nothing to do with this.

I just need to know if my scenario is able to be done.
this is a shot in the dark. BTW CRA has nothing much on LIRAs

If anyone can answer, please do!
I found this on the Desjardins Online Brokerage website. An excerpt is quoted below.

Link: When and How to Convert Your LIRA...

By law, you may keep your LIRA until the end of the year in which you turn 71, then, you must convert it. You will then have two options: a Life Income Fund or a life annuity.

People are retiring earlier these days, often at age 55. In this case, is it better to convert your LIRA immediately or wait until you turn 71? When the time comes for you to convert your LIRA into retirement income, you have some options: a Life Income Fund, or a life annuity.
Convert your LIRA immediately or wait until you turn 71?

The answer depends on your personal situation but generally, it is better to convert it as late as possible.

You will be able to delay the conversion of your LIRA if your income is sufficient. You may draw an income from various sources:

  • benefits from a company pension plan
  • public annuities
  • personal non-registered savings
  • personal income (from, for example, a rental unit or investments)

If you use your other sources of income first, the money in your LIRA continues to grow tax-free.

However, if you need additional cash to pad your budget, you might have to move up conversion deadline. Then, you may convert your LIRA, in full or in part, into a retirement income plan.


My take on the above is that you may be eligible to transfer money from a LIRA at age 55 or even earlier (especially if you retire with no or little employment income). The unknown factor is whether or not your specific LIRA would allow that. It should if the funds can be released. Phone the financial institution holding your LIRA; I found out with a simple phone call.

It appears you want to move funds from LIRA to LIF to exercise control over investments. In reality, a LIRA outside of an employers plan already allows that degree of control. I know for a fact, because I moved funds from an employer account into my own LIRA after my last paycheque and subsequent retirement. My locked-in employer contributions were freed up, so I was able to transfer the cash proceeds into a self-directed LIRA at a different financial institution.

Unless 1) you need to move funds from LIRA to LIF and make immediate cash withdrawals for iiving expenses, or 2) you are limited to suitable investments in your current LIRA, I personally believe there is no need to move the funds to a LIF until you turn 65 (or just before). Any withdrawal from a LIF is taxable as straight income in the year of withdrawal. In most cases, with few exceptions, you do not qualify for a federal credit credit on the first $2000 withdrawn from an RRIF/LIF until age 65.

More links for tax minimization:
RRIFs, LIFs and Taxation...
RRIF Minimum Withdrawals...
Cavegirl wrote: Accountants knows those tax and finance rules better than you.

Get educated, and read. What is your age, what did you do to this LIRA before, etc. You said it's Ontario LIRA, are you sure it's registered in Ontario, or the company has an office in Ontario but could be registered elsewhere? Age 65 or 71, or 55 is important, which you still don't want to answer (asked by Arrgh in the first response).
You are right. OP should do some research, or if unwilling or unable to comprehend the ins and outs of LIRAs and LIFs, just hire an accountant - one who can give snarky answers that OP "really appreciates"Winking Face.

There are qualifiers needed to make the proper decision as each individual's situation is unique. OP has not provided those. My comments apply only to my specific case (the links were found after 5 minutes of Googling). I took early retirement, and still hold RRSPS, RESPs, an RRIF and a LIRA with a spouse to split income for tax purposes should I decide to withdraw funds early.
Last edited by SAM3674 on Jul 26th, 2018 4:57 pm, edited 2 times in total.
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Jan 15, 2015
623 posts
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Deepwater wrote: I don't know the answer... I have 2 LIRAs (One Ontario and one federal). Reliable information is frustratingly hard to find.

However your proposal sounds unlikely. What's to stop anyone from transferring part of a LIRA into a LIF, then unlocking it? It would defeat the purpose of LIRAs and LIFs which is to ensure people that take the commuted value of a pension get life income from it, rather than blowing it. (Not at all suggesting that is what you are trying to do.)

FSCO regulates pensions in Ontario, so might be a good place to ask.
http://www.fsco.gov.on.ca/en/pensions/f ... fault.aspx
http://www.fsco.gov.on.ca/en/pensions/f ... -Nov07.pdf
That's an interesting point. My LIRA account was set up by funds transfer from an employer account with Standard Life. The self-directed LIRA allows me to make foolish investment choices. Not that I'm about to - at least knowingly. I don't need the funds yet, so I'll have to wait till 71 or just before and move the investments (hopefully in kind) over to my RRIF.

Thanks for the links which will help me as my past employer was incorporated in Ontario and I'm now wondering if my present LIRA qualifies as Ontario.
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May 11, 2014
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My case, I had $220 in a LIRA from a part-time job I had in Alberta. Sun Life at the time transferred into a group choices RRSP which is what you are allowed to have when you leave an employer. They refused to allow access to the funds at the time. One rule is that if the LIRA is such a small balance, you have the ability to cash it out. I was told by Sunlife at the time that it was significant enough that they couldn't allow me to cash it out. Then in 2012, they instituted a $10 monthly fee for all plans with balances under $1000. I didn't realize it until 4 months after they implemented this fee and only then did they allow me to withdraw the cash, but no refund of that fee.

I understand the rules with LIRAs, but I really think they need to give more flexibility and make the rules universal across the country,
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[OP]
Deal Addict
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Jan 20, 2009
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Toronto
SAM3674 wrote: I found this on the Desjardins Online Brokerage website. An excerpt is quoted below.

Link: When and How to Convert Your LIRA...

By law, you may keep your LIRA until the end of the year in which you turn 71, then, you must convert it. You will then have two options: a Life Income Fund or a life annuity.

People are retiring earlier these days, often at age 55. In this case, is it better to convert your LIRA immediately or wait until you turn 71? When the time comes for you to convert your LIRA into retirement income, you have some options: a Life Income Fund, or a life annuity.
Convert your LIRA immediately or wait until you turn 71?

The answer depends on your personal situation but generally, it is better to convert it as late as possible.

You will be able to delay the conversion of your LIRA if your income is sufficient. You may draw an income from various sources:

  • benefits from a company pension plan
  • public annuities
  • personal non-registered savings
  • personal income (from, for example, a rental unit or investments)

If you use your other sources of income first, the money in your LIRA continues to grow tax-free.

However, if you need additional cash to pad your budget, you might have to move up conversion deadline. Then, you may convert your LIRA, in full or in part, into a retirement income plan.


My take on the above is that you may be eligible to transfer money from a LIRA at age 55 or even earlier (especially if you retire with no or little employment income). The unknown factor is whether or not your specific LIRA would allow that. It should if the funds can be released. Phone the financial institution holding your LIRA; I found out with a simple phone call.

It appears you want to move funds from LIRA to LIF to exercise control over investments. In reality, a LIRA outside of an employers plan already allows that degree of control. I know for a fact, because I moved funds from an employer account into my own LIRA after my last paycheque and subsequent retirement. My locked-in employer contributions were freed up, so I was able to transfer the cash proceeds into a self-directed LIRA at a different financial institution.

Unless 1) you need to move funds from LIRA to LIF and make immediate cash withdrawals for iiving expenses, or 2) you are limited to suitable investments in your current LIRA, I personally believe there is no need to move the funds to a LIF until you turn 65 (or just before). Any withdrawal from a LIF is taxable as straight income in the year of withdrawal. In most cases, with few exceptions, you do not qualify for a federal credit credit on the first $2000 withdrawn from an RRIF/LIF until age 65.

More links for tax minimization:
RRIFs, LIFs and Taxation...
RRIF Minimum Withdrawals...


You are right. OP should do some research, or if unwilling or unable to comprehend the ins and outs of LIRAs and LIFs, just hire an accountant - one who can give snarky answers that OP "really appreciates"Winking Face.

There are qualifiers needed to make the proper decision as each individual's situation is unique. OP has not provided those. My comments apply only to my specific case (the links were found after 5 minutes of Googling). I took early retirement, and still hold RRSPS, RESPs, an RRIF and a LIRA with a spouse to split income for tax purposes should I decide to withdraw funds early.
I called CRA only to be on hold for 20 mins and given a number to call and held for another 10 mins before i had to do something and hang up. Financial institution where this LIRA is held was no help :)

I've done a lot of research but i'm not able to find the answers and I need people who had/has experience with LIRA accounts.

I'm aware of LIRA rollovers at 71 etc etc and mandatory conversions into a LIF.
Minimums are paid out after 1st year as the minimum is calculated on the market value on Dec 31 of first year of LIF.

I'm aware of all of the above. I'm aware that you can unlock a LIRA due to financial hardship, or small amount unlocking but I'm not asking about unlocking and such.

Anyways, what people are not understanding is that I'm not looking for requirements to unlocking. I'm looking for answers before the unlocking happens.
Is there anything stopping someone from taking any amount from the LIRA and transferring over to a LIF?


@deepwater - THANK YOU. This is what i'm questioning. sorry you worded it a lot better than I did.
"What's to stop anyone from transferring part of a LIRA into a LIF, then unlocking it? It would defeat the purpose of LIRAs and LIFs which is to ensure people that take the commuted value of a pension get life income from it, rather than blowing it. (Not at all suggesting that is what you are trying to do.)"

say John Doe had 700k in his LIRA.
John Doe is 56.
LIRA legislation is Ontatio

Can he transfer 10%/20%/30%80% 90%/100% any amount*** of his LIRA into the LIF?


Anyways, thanks to those who replied that would generate some conversation. it seems like there are a few people who had a tough experience with LIRAs and answers ARE hard to find. I've scoured the CRA website. It's useless.
This is RFD, i don't wanna pay for an accountant :) i'm asking for help to those who have the answer and are willing to help. nobody is forcing anyone to do anything.
Penalty Box
Dec 27, 2013
8003 posts
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Toronto
the full LIRA can be converted to a LIF and THEN unlocked to a RRIF/RSP depending on the age.
You cannot do a partial transfer to a LIF like your initial post suggested. It's all or none in this case.

Only a RSP can do a partial move to a RRIF.
[OP]
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daivey wrote: the full LIRA can be converted to a LIF and THEN unlocked to a RRIF/RSP depending on the age.
You cannot do a partial transfer to a LIF like your initial post suggested. It's all or none in this case.

Only a RSP can do a partial move to a RRIF.

Thank you! Any chance you would know if this transfer is done at market or cost (disposition or no disposition?)
i'm aware both are registered accounts and both are tax sheltered. for some reason my mind is questioning this part of the transfer also.
Penalty Box
Dec 27, 2013
8003 posts
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Toronto
n3o321 wrote: Thank you! Any chance you would know if this transfer is done at market or cost (disposition or no disposition?)
i'm aware both are registered accounts and both are tax sheltered. for some reason my mind is questioning this part of the transfer also.
Market value on day transfer is completed by the FI

They wouldn't sell the funds. E.g market value is $100k . Amount deposited to Lif is 100k. Of course NAV or stock closing price on day of transfer.

Process is transfer to LIF first. Then you have 60 days to submit 50% unlocking document.

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