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Locked-In Retirement Income Funds (LRIFs)



Registered Retirement Income Funds (RRIFs) and Locked-In Retirement Income Funds (LRIFs) are essentially the same. The only difference is the source of their funds. If the money came from "locked-in" pension funds, the individual must purchase an LRIF. If it came from funds that were not locked-in, the individual can purchase a RRIF.

Currently available in Ontario, Manitoba, Saskatchewan, Newfoundland and Labrador, an LRIF converts retirement only savings into regular income payments. Much like a LIF, individuals can determine the level and frequency of their income stream and how it is invested. LRIFs also have a minimum and maximum withdrawal limitation. In the case of an LRIF, however, only the minimum is based on a formula. The maximum is based on the income earned in the plan during the previous calendar year (or 6% for the first two years). In good markets, LRIFs are therefore capable of paying out more income than LIFs.

Another difference between LRIFs and LIFs is that the former does not require an individual to purchase a life annuity at age 90. In this way, an LRIF operates much like an ordinary RRIF, enabling LRIF holders to manage their investments as long as they live.