Guides> RRIF, LIF and LIRA
RRIF, LIF and LIRA — Differences and Rules: complete guide 2026
The conversion from RRSP to RRIF, and from LIRA to LIF, marks the beginning of the decumulation phase. Each vehicle has its own rules, particularly in Quebec.
RRIF — Registered Retirement Income Fund
The RRIF is the natural successor to the RRSP. An RRSP must be converted to a RRIF (or an annuity) by December 31 of the year the account holder turns 71.
Mandatory minimum withdrawals apply each year, based on the account holder's age (or the younger spouse's age, if elected). There is no maximum withdrawal — the account holder may withdraw the entire balance in a single year (with the associated tax consequences).
RRIF withdrawals are taxed as ordinary income and are subject to withholding tax on amounts exceeding the minimum.
LIRA — Locked-In Retirement Account
A LIRA receives funds from a registered pension plan (RPP) when an employee leaves their employer. The funds are "locked in" — they cannot be freely withdrawn like an RRSP.
A LIRA must be converted to a LIF by age 71. In Quebec, certain provisions allow partial or full unlocking of locked-in funds in specific circumstances.
LIF — Life Income Fund
The LIF is the RRIF equivalent for locked-in funds. It has a minimum withdrawal (like the RRIF) AND an annual maximum withdrawal determined by a regulatory formula.
In Quebec, the LIF maximum withdrawal is calculated using a formula that takes into account the account holder's age and the LIF value on January 1. This formula is specific to Quebec and differs from federal rules.
Special Quebec rule: starting at age 55, a LIF holder may transfer a portion of the funds to a regular RRIF (temporary unlocking), eliminating the withdrawal cap on that amount.
Unlocking Locked-In Funds in Quebec
Quebec allows unlocking in several situations:
• Small balance: if the LIRA/LIF balance is less than 40% of the MPE (Maximum Pensionable Earnings under the QPP), the full amount may be unlocked • Reduced life expectancy: terminal illness or shortened life expectancy • Non-resident: a non-resident of Canada for more than 2 years may unlock • One-time partial LIF-to-RRIF transfer: at age 55+, a single transfer of up to 40% of the MPE
Rules differ depending on whether the funds are subject to Quebec or federal jurisdiction. Advisors must verify the jurisdiction of the funds before providing advice.
Frequently Asked Questions
What is the minimum RRIF withdrawal?
The minimum withdrawal is calculated by multiplying the RRIF value on January 1 by a percentage based on age. For example, at age 72 the minimum is 5.28%. The account holder may use the younger spouse's age to reduce the minimum.
What is the difference between a RRIF and a LIF?
A RRIF has no maximum withdrawal; a LIF does. A LIF holds locked-in funds originating from a pension plan (via a LIRA). A RRIF holds funds originating from an RRSP. Both have mandatory minimum withdrawals.
Can a LIRA be unlocked in Quebec?
Yes, in certain circumstances: small balance (less than 40% of the MPE), reduced life expectancy, non-residency for 2+ years, or a one-time partial LIF-to-RRIF transfer at age 55 or older. Always verify whether the funds are subject to Quebec or federal jurisdiction.
At what age must an RRSP be converted to a RRIF?
By December 31 of the year the account holder turns 71 at the latest. It is possible to convert earlier if withdrawals are needed. Some clients choose to convert partially before age 71 to optimize withdrawals.
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Résumé en français : Guide sur le FERR (Fonds enregistré de revenu de retraite), le FRV (Fonds de revenu viager) et le CRI (Compte de retraite immobilisé) au Québec. Couvre les retraits minimums et maximums, les délais de conversion, les dispositions de déverrouillage spécifiques au Québec et les stratégies de décaissement.