As a person who has managed their own investments for 30 years, I have to say you deliver the most coherent, logically presented, and factual information I have ever had the privilege to watch. Please keep up the good work! This stuff should be mandatory in "retirement school". I know, there isn't one, but there should be. If I were teaching in that class, the first thing I would cover is what "fiduciary" means, and why you should run, not walk, away from anybody behind a desk in a bank. Oh, and pay for advice, not for someone to "invest" for you.
What I love about your "style" is it feels like a conversation with someone who knows a topic well. Financial advisors at banks drive me mad. Some treat you like a child ("Now, this is a REGISTERED account. Registered means the GOVT controls ...") in a condescending way while others, well, don't seem to know what they're talking about. I really dread talking to them - so frustrating I'd rather just deal with a website. But your "here's this neat feature - let me tell you about it" is so much better.
Thanks Adam, Let me try to summarize (Correct me if I am wrong): LIRA: (come from a Pension) (Locked In Registered Account) 1) You can invest in same types of investments as RRSP. 2) RRSP --> RRIF (After 71 years old) LIRA --> LIF (After 55 years old) RRSP --> withdrawals--> no Min, no Max RRIF --> withdrawals--> Min, but no Max LIF --> withdrawals--> Min & Max 3) Unlocking: (55 years or older unlock LIRA -->LIF) Ontario: 50% --> can be transferred -->RRSP 50% --> have to be stay locked in LIF a) Tip 1: unlock the maximum of LIRA--> and transfer to RRSP(more flexible) b) Tip 2: Draw down maximum from LIF first (before RRSP and RRIF) c) Tip 3: Move LIRA --> LIF after 55 years old as soon as possible
What a fantastic presenter! Others who talk about Lira are junk. It's preferable to listen to Adam's talks rather than read dreadfully written bureaucratic jargon. Thank you very much, sir!
Great video, Adam. I really appreciate the information you disseminated in this one. When I left my previous employer 22 years ago, the LIRA was basically described as the same as an RSP, but for the pension I was needing to leave. It was explained so casually that it never occurred to me that there would be nuances to research. I was surprised to learn from you that I can unlock part of the LIRA today (I am past 55) and never realized there were withdrawal maximums. I was also surprised to learn that the LIRA could be registered in different ways (turns out mine is Federal). Thanks so much for all the work you put into these videos. I always look forward to the next one!
I had a Federal LIRA, transferred to a LIF, moved 50% to my RRSP and then I was able to use the small amount provision to also transfer the remaining balance in my RRSP. No RRSP contribution room was required. Great video Adam! This info is not something that is widely available to the general public for some reason. It took a considerable effort to find the information on my own and to navigate the system to get it done 6 months ago. The investment firm where the LIRA and RRSP accounts are held required that the documents for both processes be signed under oath.
To find the unlocking amounts per province took a detective to find! That's the reason this video was crucial to get out. Getting proper advice shouldn't be so hard!
Thank you for the explanation . So for example , I have a LIRA and the current value is $100,000 . In Ontario At 55yrs , it will convert to a LIF . I can unlock 50% so $50,000 I put in an RRSP for example . Then the remaining funds in the LIF of $ 50,000 I can draw the max percentage ( 6.51% ) paid out monthly .
Thanks for doing this Adam! I know that most of this is available on the CRA website, but my eyes glaze over every time I try to read and digest all the rules. Your video confirmed the few LIRA related details that I already knew and, more importantly, helped answer all the things I didn't know. Well done!
🐝I wish I had seen this video 2 years ago. I never understood the LIRA, and never had a need to since you cannot have access to it until you retire(that was my understanding), so out of sight out of mind. I had forgotten that I had one until this year, and my previous bank is requesting that I provide proof that it was ever transferred from the "Pension Administrator " to them 21 years ago. I no longer bank with that institution, and I have never received any correspondence from this financial institution in the past 21 years. The bank in question was the intended location for the transfer to the LIRA according to my communication with the "Pension Administrator" both verbal and their documentation. I consulted a lawyer for help and he was a complete waste of my time😡. You covered all the bases in this video that's is very helpful to my current situation.🐝
Hi Adam, thank you so much for your great videos. You mentioned that minimums, maximums and unlocking is depended on where the plan is registered. I live in Quebec and when reading up on LIRAs and LIFs, their web site says "the province in which the member worked when he or she ceased active plan membership". I work in Quebec but the plan is registered in Ontario so I just want to make sure since there is no unlocking in Quebec. Thanks!!
Good morning good video guys. I live in BC, but my locked in pension is from my Saskatchewan employment. With regards to unlocking, is it where your pension comes from or where you live?
Great video thanks. a quick question, 50% of 300K, 150K is unlocked to RRSP, and remaining 50%, 150K transferred to LIF, when can this 50% be unlocked or I have to withdraw it over the time @ max allowed rate?
If you are able to move the funds from a LIF to RSP and only able to move 50%, can it be done "In Kind" ? if yes, how is the # of stocks calculated to determine what 50% since we would end up in partial shares. Do you have any rules you could share? Please and thanks.
I really appreciate the fact that you just told us that you plan your videos weeks in advance. This builds great trust and anticipation. Well done Adam!
From what I understand, not all Quebec LIFs allow taking a temporary income. But is the LIRA holder always allowed to choose a LIF that does allow it, when converting?
My bank says I must convert the LIRA to a RLIF first to unlock 50%. I cannot just unlock 50% into a RRSP when converting from my LIRA to a LIF (age 55+)
FYI, ON,BC,AB,NL Maximum calculations are based on the greater of A the calculation table and B the previous years investment returns. QC,AB,BC,NB,MB Will allow you to withdrawal the full payment amount if you start your LIF mid year without the amount being prorated.
what would you do if someone has school debts? after they are done they get a job should they pay that down first or start investing in rrsps or tfsa? nothing to do with liras sorry not sure if there is a vid on this yet
Depends on interest rate and what they r making. A doctor for instance will want to use RRSP for the tax break. It's situation for sure. In general the focus should be to pay down the debt tho
Say you have a DB pension plan including a DB survivor pension plan. How do you go about in putting that money in a LIRA? How do you know you that the actuarial present value of the plan is correct and the correct value is transferred to the LIRA? What is the role of your partner in this whole process as he or she also has pension claim in the DB plan?
@@freedomlife3623 yes, I agree. It is odd, however that pension plans are not fully funded all of the time and that you can lose it if company goes bankrupt. . If a company gives you a benefit (pension) the company should fund it 100% immediately and externally. There is an obligation for a company to pay the salaries on time as well. DB pensions are nothing less than that; salary you are entitled to at a later stage.
Adam, do I to immediately have to start taking the min or max amount from a LIF or do I have until just before calendar year end of the year I convert the LIRA to a LIF? Thanks.
Great video. I retired as an Ontario resident at 60.5, but got a bit of a surprise because my employer is Quebec based so the fund was registered there, and I couldn't unlock any of it. Bummer. I've been making the minimum withdrawal because I don't need the money that much, so its total value has grown about 30% in the last 5 years even taking 4-ish points out of it annually. I'm 66 now and need to start maxing out the drawdown I think.
Hi Adam. Thank you for posting such accurate and complete information to help the novice understand financial planning. I am looking to free up as much money as possible so I have access to as much cash as possible in case I need it. I haven't officially "retired" from my job but I live in BC and have reached the age of 55. I want to start withdrawing the maximum amount allowed from my LIF and putting that directly into an RSP account. If I do this will the tax I have to pay be a wash because I've put the funds back into an RSP? The idea here is that I am freeing up access to cash and building up an emergency fund where I am able to withdraw as much as I want after I retire from work when my income will be much lower. Your thoughts on this would be very much appreciated. Thank you again.
Yes this could work. Just make sure you have the RRSP room. If you are already in a lower tax bracket maybe put some of the LIF into RRSP and some to TFSA. More flexibility for retirement.
What if the client was in Quebec but is now located in Ontario. 0% unlock in Quebec however 50% in Ontario... So would we be able to unlock the funds because the client is now in a new province?
I have a question about lira. If you unlock your lira do you have to start drawing on the lif portion of the lira the moment you unlock the other portion into regular RRSP? Or can you defer and start taking the Lif at a later date?
I need some clarification on the age. I turn 55 in June but on the OFSI website it states as long as you are turning the age of 55 in the calendar year meaning you can be 54 and still apply to change Lira into a RLIF and subsequent Lif.
Question: maybe you answered this in the video but I didn't catch it... define "retirement", because you can start drawing down money from your LIRA/LIF when you retire, without having to unlock the LIRA, but what if I retire early, like age 40 or 45 for example? Do I have to wait until the minimum age (I'm federally regulated) to convert it to a LIF and draw money from it?
Hi Adam! I'm glad to have found your video as I'm planning on doing a hardship withdrawal. In the calculation of my expected income, do I include dividemd income from my TFSA (since it is income) or do I exclude it (since it is tax free)? TIA
We moved to Manitoba 13 years ago from Alberta. Does that mean out LIRA is an Alberta or Manitoba LIRA? Where do I look for find this information as to whether it is a MB, AB or Federal LIRA?
I have a LIRA based in Ontario and I am 64 years old. I know that Ontario allows you to unlock 50% of your LIRA to an RRSP. My question is as follows: Do I have to first convert my LIRA to a LIF before I can unlock it and transfer 50% to my RRSP or can I transfer 50% and have the remaining funds be left in a LIRA?
This was a great explanation and confirmed what I thought my research showed in an easily understood manner! One thing I can't seem to find out is if the one time unlocking applies to each LIRA separately? Example : If someone unlocked one LIRA at 55 a few years and has one remaining that was not touched - can it too now be unlocked, and if so and the remainder of that one fund is under the YMPE can it too be transferred out or does that combine with the funds in the previously established LIF. Thanks so much again for these videos, I am a new fan !
Thank you very much for your videos. I always thought that I was going to keep my LIRA until 71. Now. I will be talking to my bank to do as you suggest to reduce my income taxes later.
thank you Adam! all your vedios are very helpful! Question for LIRA early withdrawals: in Ontario, your chart shows unlocking age is NA, means any age can unlock LIRA? thx!
I think this is a great video with alot of information and i liked the tables put together. I currently have a federal LIRA. I was planning to leave the funds there but after watching your video I would like to start the process of moving 50% into my RRSP and changing the remainder to a LIF. In the LIF you can have different types of qualifying investments eg. stocks, etfs mutual funds. I asked how can i tell which ones of the etf's , stocks etc qualifies to be in the lif. The help desk at the bank said when you convert we will tell you at the time. is there a way a can tell what qualifies to be in the LIF and do i have to have certain amount in cash for the min/max withdrawal for the year?
I would like to buy back some previous pensionable service with my LIF after I have unlocked my Lira. Is that allowed? I don't see why not but I don't make the rules. Thanks for your videos. I am sure I've watched all of them! Once I am closer to retirement I plan on hiring your firm for fee for service retirement plan. For now your videos are a great source of education on retirement planning.
Question about the unlock - if I move the LIRA to an RRSP, do I need to have enough personal contribution limit, and or, is the contribution limit reduced by the unlock .. from the way you’re speaking I’m assuming no but I should ask
Question If u contributed and the company contributed also Where does it all go? All goes into the lira or does your contribution go to a rrsp and the company goes to a lira?
Hi I am curious to why in this video you support the idea of moving money out of a LIF or LIRA as quickly as possible. I understand the idea of more flexibility, but is there any reason for favoring withdrawal of these funds earlier over taking say CPP at an earlier age. Your thoughts? Also what is the quickest way to determine if you have a federally registered LIRA versus a provincially registered one?
David, if you watch any of our other videos you will have the answer around why we take it early and delay CPP. As soon as it makes sense from an income level, convert your LIRA to LIF to start emptying the most stringent account you have - which hopefully makes sense. As for the registration, contact your financial institution as they will have it on file.
Hey Adam...I'm having difficulties transferring my LIRA(s) to a RRSP. I actually have 2, one is from SK the other is Federal. Do you have a link to the Canadian Government webpage that states that I can transfer 50% of the federal one and 100% of the SK one. Right now Questrade thinks I can only do this for Hardship, etc...but that refers to withdrawing funds not simply Unlocking them and transferring to a RRSP.
Great video. I have a pension plan through my employer (Lira), i am too young to withdraw it but i do not like their investment options. Is there a way i can gain access to manage the funds myself without withdrawing? thx
If you unlock a portion of your LIRA to an RRSP, do you then have to pay tax on this "excess" amount into your RRSP (and I'm saying you've done this in your first year of retirement)?
It would typically stay as Alberta. But I have seen where a company has HQ is 2 provinces and a transfer of employee triggers a transfer of legislation. So check with your HR or where you hold the LIRA
Love the video! Question…. (I’m in Ontario) Can I convert my LIRA to a LIF on Jan 1st of the year I turn 55, or do I have to wait until my actual 55th birthday.
Adam. what is the definition of "investment return" as it relates to maximum withdrawal? If I generate $3000 a month in dividend income can I not take $2900 a month as my maximum? Or, is it the "investment return" defined as strictly capital appreciation? Or, is it capital appreciation and dividends added together? Thank you.
I have a LIRA & I would like to do a one time withdraw using financial hardship. Do I have to change LIRA to LIF or can I withdraw directly from LIRA and the tax implications?
Thanks again for your insight. Your videos are greatly appreciated. After doing some research, I found several gov websites explaining how to transfer money from a LIF to an RRSP or RRIF. However, I could not find information about transferring stocks from a LIF to an RRSP or RRIF. I am approaching 66 and it is unlikely that I will be able to sell all my stocks at profit before turning 71 so I wonder if I can transfer stocks in kind. Is this acceptable in Ontario.
Great video Adam. Thanks for all the information you constantly provide to many Canadians. I read somewhere on a blog that once you've moved your LIRA to a LIF and reach the age of 80, you are required to purchase an annuity with the remaining assets. Is this still true?
I assume that in order to convert a LIRA into a LIF and move it into an RRSP that I would need to have room in my RRSP to do so. What if I don't have the room in my RRSP?
Question on setting up a LIRA/LIF. If I pass, I understand it goes to my spouse. If spouse then passes, can their beneficiaries (children) then take it as a LUMP SUM? Or, do children have to wait until they retire to access it then?
@@ParallelWealth thanks... was contemplating taking a commuted value from my pension and turning it into a LIRA vs keeping in my old defined pension. This lump sum option is a great plus for a LIRA
I’m from the prairies and had a DCPP with my prev employment and I believe that was registered in either ON or QC…I was able to transfer it out to a LIRA this year and I plan to retire in12yrs time but in BC. Based on the parameters, in terms of conversion you mentioned, is it based from the province I retired at or where the DCPP/LIRA was registered?
Hello Adam, thanks for summarizing all of this potentially complicated information. One question though. At minute 13:30 there is a table highlighting unlocking a LIRA to RSP and includes Early Retirement criteria. Am I reading this right: If you meet the criteria FIRST (small amount, shorten life, etc) only then can you apply to unlock a portion and transfer to RSP? Sorry, I read the table as posting 2 pieces of information and am making sure that I understand it correctly... as I am currently planning my retirement. Thank you
If you meet any of the 1st criteria, then you could potentially unlock 100%. If you don't meet that criteria then potential for unlocking based on province or territory you live.
Hi Adam, great content, love your videos! I am 59 years old and I have a very large LIRA that is registered in BC so unfortunately I don't have allot of options for unlocking early. Other than the options you have already discussed in this video; I have read and been told by my Financial Adviser that providing I have contribution room in my RRSP; I would be able to transfer the difference between the minimum and maximum withdrawal amounts of my LIRA to an RRSP annually. The latter option is not spoken about in your video. Are you able to confirm this unlocking strategy is a viable one? Thanks!
Tracey, yes you can - but also look to pull the max annually and deposit to your TFSA or non-reg and see what the greatest tax benefit is for you. Everyone will be different, but this is typically a great (and better) way to do it.
You didn’t mention the tax implications when you move your pension to a Lira $300.000 pension example you have to take $80.000 in cash minus tax so I have been told
I have talked to my advisor and he said I can’t unlock my lira to my rrsp.I live in Saskatchewan they said it has to be transferred to a locked in rsp. Are they wrong thanks
I was just researching this topic earlier this afternoon! We have as a couple 40%ish retirement savings in LIRAs and now that we are in our mid to late 50s we are considering our early retirement income options. Thanks for your videos and this particularly timely one!
Hi Adam, thanks for the great overview. It seems that releasing funds in a tax-effective manner is as important as accumulating them. Many great points to consider in retirement. Thanks!
As a person who has managed their own investments for 30 years, I have to say you deliver the most coherent, logically presented, and factual information I have ever had the privilege to watch. Please keep up the good work! This stuff should be mandatory in "retirement school". I know, there isn't one, but there should be. If I were teaching in that class, the first thing I would cover is what "fiduciary" means, and why you should run, not walk, away from anybody behind a desk in a bank. Oh, and pay for advice, not for someone to "invest" for you.
What I love about your "style" is it feels like a conversation with someone who knows a topic well. Financial advisors at banks drive me mad. Some treat you like a child ("Now, this is a REGISTERED account. Registered means the GOVT controls ...") in a condescending way while others, well, don't seem to know what they're talking about. I really dread talking to them - so frustrating I'd rather just deal with a website. But your "here's this neat feature - let me tell you about it" is so much better.
Thanks CanuckJim. Much appreciated and glad my 'style' comes off more welcoming
Thanks Adam,
Let me try to summarize (Correct me if I am wrong):
LIRA: (come from a Pension) (Locked In Registered Account)
1) You can invest in same types of investments as RRSP.
2) RRSP --> RRIF (After 71 years old)
LIRA --> LIF (After 55 years old)
RRSP --> withdrawals--> no Min, no Max
RRIF --> withdrawals--> Min, but no Max
LIF --> withdrawals--> Min & Max
3) Unlocking:
(55 years or older unlock LIRA -->LIF)
Ontario:
50% --> can be transferred -->RRSP
50% --> have to be stay locked in LIF
a) Tip 1: unlock the maximum of LIRA--> and transfer to RRSP(more flexible)
b) Tip 2: Draw down maximum from LIF first (before RRSP and RRIF)
c) Tip 3: Move LIRA --> LIF after 55 years old as soon as possible
🐝Thanks for the summary. It's very helpful🐝
What a fantastic presenter! Others who talk about Lira are junk. It's preferable to listen to Adam's talks rather than read dreadfully written bureaucratic jargon. Thank you very much, sir!
Thanks!
Great video, Adam. I really appreciate the information you disseminated in this one. When I left my previous employer 22 years ago, the LIRA was basically described as the same as an RSP, but for the pension I was needing to leave. It was explained so casually that it never occurred to me that there would be nuances to research. I was surprised to learn from you that I can unlock part of the LIRA today (I am past 55) and never realized there were withdrawal maximums. I was also surprised to learn that the LIRA could be registered in different ways (turns out mine is Federal). Thanks so much for all the work you put into these videos. I always look forward to the next one!
Thanks James! Great to hear the content is helping make change. All the best.
I had a Federal LIRA, transferred to a LIF, moved 50% to my RRSP and then I was able to use the small amount provision to also transfer the remaining balance in my RRSP. No RRSP contribution room was required. Great video Adam! This info is not something that is widely available to the general public for some reason. It took a considerable effort to find the information on my own and to navigate the system to get it done 6 months ago. The investment firm where the LIRA and RRSP accounts are held required that the documents for both processes be signed under oath.
I agree it was a painful process and took couple of months in my Ontario LIRA at 55 to transfer to LIF and RRSP.
To find the unlocking amounts per province took a detective to find! That's the reason this video was crucial to get out. Getting proper advice shouldn't be so hard!
RRSP contribution room was my question, thank you for answering it.
Your communication style and knowledge are so appreciated!!😊
Thank you for the explanation .
So for example , I have a LIRA and the current value is $100,000 . In Ontario
At 55yrs , it will convert to a LIF . I can unlock 50% so
$50,000 I put in an RRSP for example . Then the remaining funds in the LIF of $ 50,000 I can draw the max percentage ( 6.51% ) paid out monthly .
Thanks for doing this Adam! I know that most of this is available on the CRA website, but my eyes glaze over every time I try to read and digest all the rules.
Your video confirmed the few LIRA related details that I already knew and, more importantly, helped answer all the things I didn't know. Well done!
My pleasure!
This video is amazing! I have LIRA in SK and I happy to know I can unlock 100%. Thank you for your information
Great video… Manitoba Lira, happy to hear I can unlock 100%!
🐝I wish I had seen this video 2 years ago. I never understood the LIRA, and never had a need to since you cannot have access to it until you retire(that was my understanding), so out of sight out of mind. I had forgotten that I had one until this year, and my previous bank is requesting that I provide proof that it was ever transferred from the "Pension Administrator " to them 21 years ago. I no longer bank with that institution, and I have never received any correspondence from this financial institution in the past 21 years. The bank in question was the intended location for the transfer to the LIRA according to my communication with the "Pension Administrator" both verbal and their documentation. I consulted a lawyer for help and he was a complete waste of my time😡. You covered all the bases in this video that's is very helpful to my current situation.🐝
So far, the best explanation about LIRA I have found online.. Thank you!
You're very welcome!
Love your videos. So great to have Canadian information
Glad you like them!
Excellent video one of the best I have seen on the web
Thank you for answering all the LIRA questions I didn’t know I had. As I have a lira this is very useful content.
It is a very straight forward explanation and is exactly the information I was looking for 🎉
Really good explanation! Especially your Lira to Lif details. Thanks a lot
Fantastic video from a fantastic channel. Thank you for the quality content Adam!
Yet another amazingly clear and informative video. Awesome!
Hi Adam, thank you so much for your great videos. You mentioned that minimums, maximums and unlocking is depended on where the plan is registered. I live in Quebec and when reading up on LIRAs and LIFs, their web site says "the province in which the member worked when he or she ceased active plan membership". I work in Quebec but the plan is registered in Ontario so I just want to make sure since there is no unlocking in Quebec. Thanks!!
Correct, where you work is NOT necessarily where they plan is based. Sounds like yours is Ontario, which is much better than Quebec for unlocking.
Thank you so much you have helped me with some decisions. I appreciate that
What about transferring your LIRA into a RLIF?
Great video Adam. What if you have 5K in a LIRSP in Ontario. Can you unlock it and move to an RRSP?
Yes you could
Do you need sufficient RRSP room?
Good morning good video guys. I live in BC, but my locked in pension is from my Saskatchewan employment.
With regards to unlocking, is it where your pension comes from or where you live?
Whalen you unlock and move to an RRSP is that contribution room already accounted for or do you need enough to match the unlocked amount?
Already accounted for. No contribution room needed.
Do you qualify for an RRSP deduction when you do this ^^^?
Thanks for the info, this will help me prepare of what is there for me when I retire.
Glad it was helpful!
great video, thank you for taking the time to make these
Can i unlock when still working with the same company. It’s define contribution plan.
Yes
Great video thanks. a quick question, 50% of 300K, 150K is unlocked to RRSP, and remaining 50%, 150K transferred to LIF, when can this 50% be unlocked or I have to withdraw it over the time @ max allowed rate?
Hi Adam. Lira to a lif.
RRSP to a rip. Can all this be started at 55 years old. Thanks. This is a great video. Thanks for all your knowledge. The best
If you are able to move the funds from a LIF to RSP and only able to move 50%, can it be done "In Kind" ? if yes, how is the # of stocks calculated to determine what 50% since we would end up in partial shares. Do you have any rules you could share? Please and thanks.
I really appreciate the fact that you just told us that you plan your videos weeks in advance. This builds great trust and anticipation. Well done Adam!
When you have 4 little kids not much can be planned...so I do what I can:)
Great information Adam. Thanks for all your videos! I'm learning a lot.
Great video, I appreciate the knowledge.
Thanks Iron.
What about the "temporary income" that can be withdrawn from a LIF in Quebec? That can be a substantial amount.
From what I understand, not all Quebec LIFs allow taking a temporary income. But is the LIRA holder always allowed to choose a LIF that does allow it, when converting?
Great video Adam as always !!! What if you’re converting your LIRA to an RRSP but your RRSP is maxed out ??
Don't need room. It's a direct roll over
My bank says I must convert the LIRA to a RLIF first to unlock 50%. I cannot just unlock 50% into a RRSP when converting from my LIRA to a LIF (age 55+)
Great and very informative video Adam. Thanks for posting.
Glad it was helpful!
Thank you so much Adam.
My pleasure!
FYI,
ON,BC,AB,NL Maximum calculations are based on the greater of A the calculation table and B the previous years investment returns.
QC,AB,BC,NB,MB Will allow you to withdrawal the full payment amount if you start your LIF mid year without the amount being prorated.
Manitoba is prorated. Can't confirm the others before researching.
what would you do if someone has school debts? after they are done they get a job should they pay that down first or start investing in rrsps or tfsa? nothing to do with liras sorry not sure if there is a vid on this yet
Depends on interest rate and what they r making. A doctor for instance will want to use RRSP for the tax break. It's situation for sure. In general the focus should be to pay down the debt tho
Say you have a DB pension plan including a DB survivor pension plan. How do you go about in putting that money in a LIRA? How do you know you that the actuarial present value of the plan is correct and the correct value is transferred to the LIRA? What is the role of your partner in this whole process as he or she also has pension claim in the DB plan?
@@freedomlife3623 yes, I agree. It is odd, however that pension plans are not fully funded all of the time and that you can lose it if company goes bankrupt. . If a company gives you a benefit (pension) the company should fund it 100% immediately and externally. There is an obligation for a company to pay the salaries on time as well. DB pensions are nothing less than that; salary you are entitled to at a later stage.
Adam, do I to immediately have to start taking the min or max amount from a LIF or do I have until just before calendar year end of the year I convert the LIRA to a LIF? Thanks.
Great video. I retired as an Ontario resident at 60.5, but got a bit of a surprise because my employer is Quebec based so the fund was registered there, and I couldn't unlock any of it. Bummer. I've been making the minimum withdrawal because I don't need the money that much, so its total value has grown about 30% in the last 5 years even taking 4-ish points out of it annually. I'm 66 now and need to start maxing out the drawdown I think.
Hi Adam. Thank you for posting such accurate and complete information to help the novice understand financial planning. I am looking to free up as much money as possible so I have access to as much cash as possible in case I need it. I haven't officially "retired" from my job but I live in BC and have reached the age of 55. I want to start withdrawing the maximum amount allowed from my LIF and putting that directly into an RSP account. If I do this will the tax I have to pay be a wash because I've put the funds back into an RSP? The idea here is that I am freeing up access to cash and building up an emergency fund where I am able to withdraw as much as I want after I retire from work when my income will be much lower. Your thoughts on this would be very much appreciated.
Thank you again.
Yes this could work. Just make sure you have the RRSP room.
If you are already in a lower tax bracket maybe put some of the LIF into RRSP and some to TFSA. More flexibility for retirement.
@@ParallelWealth Thank you!!
What if the client was in Quebec but is now located in Ontario. 0% unlock in Quebec however 50% in Ontario... So would we be able to unlock the funds because the client is now in a new province?
I have a question about lira. If you unlock your lira do you have to start drawing on the lif portion of the lira the moment you unlock the other portion into regular RRSP? Or can you defer and start taking the Lif at a later date?
Right away
I need some clarification on the age. I turn 55 in June but on the OFSI website it states as long as you are turning the age of 55 in the calendar year meaning you can be 54 and still apply to change Lira into a RLIF and subsequent Lif.
Question: maybe you answered this in the video but I didn't catch it... define "retirement", because you can start drawing down money from your LIRA/LIF when you retire, without having to unlock the LIRA, but what if I retire early, like age 40 or 45 for example? Do I have to wait until the minimum age (I'm federally regulated) to convert it to a LIF and draw money from it?
Www.parallelwealth.com/lira
great vid man
Hi Adam! I'm glad to have found your video as I'm planning on doing a hardship withdrawal. In the calculation of my expected income, do I include dividemd income from my TFSA (since it is income) or do I exclude it (since it is tax free)? TIA
Great videos, learning alot.
Do you have any offices in Toronto?
Yes we do, but do all work remotely
Great video, by the way! I really enjoy watching & learning from your videos 😊
Thx Debra
We moved to Manitoba 13 years ago from Alberta. Does that mean out LIRA is an Alberta or Manitoba LIRA? Where do I look for find this information as to whether it is a MB, AB or Federal LIRA?
Do I have pay taxes when transfering my defined benefit pension plan to a lira?
No, but part of the amount might be paid out as cash, and thus taxes due
I have a LIRA based in Ontario and I am 64 years old. I know that Ontario allows you to unlock 50% of your LIRA to an RRSP. My question is as follows: Do I have to first convert my LIRA to a LIF before I can unlock it and transfer 50% to my RRSP or can I transfer 50% and have the remaining funds be left in a LIRA?
Do I have to have rrsp contribution room to move my lira into my rrsp?
No you dont
Hi, I am working with an employer with pension, can I get the money vested with the pension plan to LIRA when I turn age 55 without quitting the work
This was a great explanation and confirmed what I thought my research showed in an easily understood manner! One thing I can't seem to find out is if the one time unlocking applies to each LIRA separately? Example : If someone unlocked one LIRA at 55 a few years and has one remaining that was not touched - can it too now be unlocked, and if so and the remainder of that one fund is under the YMPE can it too be transferred out or does that combine with the funds in the previously established LIF. Thanks so much again for these videos, I am a new fan !
Thank you very much for your videos. I always thought that I was going to keep my LIRA until 71. Now. I will be talking to my bank to do as you suggest to reduce my income taxes later.
Don’t they allow you to unlock it all in every province if it’s below your YMPE?
Yup, there are a few unlocking provisions regardless of location. All that detail is in the link provided.
thank you Adam! all your vedios are very helpful! Question for LIRA early withdrawals: in Ontario, your chart shows unlocking age is NA, means any age can unlock LIRA? thx!
No set date we found online, but fairly certain it's still 55.
Plz answer me is there any way to buy first home with locked in rrsp ?
No
I think this is a great video with alot of information and i liked the tables put together. I currently have a federal LIRA. I was planning to leave the funds there but after watching your video I would like to start the process of moving 50% into my RRSP and changing the remainder to a LIF. In the LIF you can have different types of qualifying investments eg. stocks, etfs mutual funds. I asked how can i tell which ones of the etf's , stocks etc qualifies to be in the lif. The help desk at the bank said when you convert we will tell you at the time. is there a way a can tell what qualifies to be in the LIF and do i have to have certain amount in cash for the min/max withdrawal for the year?
You can invest in your LIF like any other account (RRSP, TFSA, LIRA etc)
I would like to buy back some previous pensionable service with my LIF after I have unlocked my Lira. Is that allowed? I don't see why not but I don't make the rules. Thanks for your videos. I am sure I've watched all of them! Once I am closer to retirement I plan on hiring your firm for fee for service retirement plan. For now your videos are a great source of education on retirement planning.
You have to buy back before you leave your employer. Too late once in a LIF
@@ParallelWealth Can I not unlock my LIRA shortly before retiring? Then pay for pension buy back with LIF, saving max RRSP for go-go phase.
Likely can't pay back with LIF, but worth checking
Question about the unlock - if I move the LIRA to an RRSP, do I need to have enough personal contribution limit, and or, is the contribution limit reduced by the unlock .. from the way you’re speaking I’m assuming no but I should ask
No contribution room needed to unlock from LIRA to RRSP.
Question
If u contributed and the company contributed also
Where does it all go?
All goes into the lira or does your contribution go to a rrsp and the company goes to a lira?
Typically all LIRA, but some are combined
@@ParallelWealth thanks. What would be your core etf in the lira
Can you invest in ETFs or Stocks using LIRA account?
Yes
Question, how do I find out where the LIRA is registered? It was set up in Alberta after my husband left EMCO (the plumbing company).
You would have to check with the financial institution you have it invested at.
Hi I am curious to why in this video you support the idea of moving money out of a LIF or LIRA as quickly as possible. I understand the idea of more flexibility, but is there any reason for favoring withdrawal of these funds earlier over taking say CPP at an earlier age. Your thoughts? Also what is the quickest way to determine if you have a federally registered LIRA versus a provincially registered one?
David, if you watch any of our other videos you will have the answer around why we take it early and delay CPP. As soon as it makes sense from an income level, convert your LIRA to LIF to start emptying the most stringent account you have - which hopefully makes sense. As for the registration, contact your financial institution as they will have it on file.
Is there any advantage of a Rif or RRSP in the advent of death for survivor tax purposes?
Hey Adam...I'm having difficulties transferring my LIRA(s) to a RRSP. I actually have 2, one is from SK the other is Federal. Do you have a link to the Canadian Government webpage that states that I can transfer 50% of the federal one and 100% of the SK one. Right now Questrade thinks I can only do this for Hardship, etc...but that refers to withdrawing funds not simply Unlocking them and transferring to a RRSP.
Great video. I have a pension plan through my employer (Lira), i am too young to withdraw it but i do not like their investment options. Is there a way i can gain access to manage the funds myself without withdrawing? thx
If you unlock a portion of your LIRA to an RRSP, do you then have to pay tax on this "excess" amount into your RRSP (and I'm saying you've done this in your first year of retirement)?
Wherefore I find out where my LIRA is registered? Thanks
Whatever financial institution you hold your money at will have that info
is unlocking a LIRA based on where you currently live, or where the pensioned in registered?
What province the pension is registered to.
@@ParallelWealth The pension was registered in Ontario, but I now live in BC.
@@ParallelWealth Hi, the pension is registered in Ontario, but now I am living in BC.
Great Video!
What if I transfer my LIRA from Alberta to BC? Which province would have jurisdiccion?
It would typically stay as Alberta. But I have seen where a company has HQ is 2 provinces and a transfer of employee triggers a transfer of legislation. So check with your HR or where you hold the LIRA
@@ParallelWealth Thanks.
Can a LIRA be hedged and protected in times of unstable markets?
Sure, just have it invested accordingly
Love the video!
Question…. (I’m in Ontario) Can I convert my LIRA to a LIF on Jan 1st of the year I turn 55, or do I have to wait until my actual 55th birthday.
Jan 1
Adam. what is the definition of "investment return" as it relates to maximum withdrawal? If I generate $3000 a month in dividend income can I not take $2900 a month as my maximum? Or, is it the "investment return" defined as strictly capital appreciation? Or, is it capital appreciation and dividends added together? Thank you.
I live in BC but I work for an airline that's federally regulated so my old DC plan must than be Federally registered so I can put 50% in my RRSP?
Likely, but confirm with them first. If it is Federal then you can unlock 50%.
@@ParallelWealth checked my statement its Federal thanks for the great info. "Where registered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Federal Jurisdiction"
LIRA is a prime candidate for S&P 500 index fund like VOO as an example and there is no 15% WHT.
Unlocking 50% to roll in RRIF and what about the other 50 % ? When can that be unlocked?
Under small account provision. Learn more at www.parallelwealth.com/lira
I have a LIRA & I would like to do a one time withdraw using financial hardship. Do I have to change LIRA to LIF or can I withdraw directly from LIRA and the tax implications?
Thanks again for your insight. Your videos are greatly appreciated. After doing some research, I found several gov websites explaining how to transfer money from a LIF to an RRSP or RRIF. However, I could not find information about transferring stocks from a LIF to an RRSP or RRIF. I am approaching 66 and it is unlikely that I will be able to sell all my stocks at profit before turning 71 so I wonder if I can transfer stocks in kind. Is this acceptable in Ontario.
Yes, it will all transfer in kind.
@@ParallelWealth Thank you for your prompt reply
Great video Adam. Thanks for all the information you constantly provide to many Canadians. I read somewhere on a blog that once you've moved your LIRA to a LIF and reach the age of 80, you are required to purchase an annuity with the remaining assets. Is this still true?
Nope, never heard of that and have clients over 80 with a LIF!
Retirement isn’t an end goal, but a journey best secured by careful and consistent investments.
I assume that in order to convert a LIRA into a LIF and move it into an RRSP that I would need to have room in my RRSP to do so. What if I don't have the room in my RRSP?
Don, no you do not need contribution room to unlock your LIRA to a RRSP.
Question on setting up a LIRA/LIF. If I pass, I understand it goes to my spouse. If spouse then passes, can their beneficiaries (children) then take it as a LUMP SUM? Or, do children have to wait until they retire to access it then?
Lump sum (added to income in year of death).
@@ParallelWealth thanks... was contemplating taking a commuted value from my pension and turning it into a LIRA vs keeping in my old defined pension. This lump sum option is a great plus for a LIRA
I’m from the prairies and had a DCPP with my prev employment and I believe that was registered in either ON or QC…I was able to transfer it out to a LIRA this year and I plan to retire in12yrs time but in BC. Based on the parameters, in terms of conversion you mentioned, is it based from the province I retired at or where the DCPP/LIRA was registered?
Where the plan was registered
Hello Adam, thanks for summarizing all of this potentially complicated information. One question though. At minute 13:30 there is a table highlighting unlocking a LIRA to RSP and includes Early Retirement criteria. Am I reading this right: If you meet the criteria FIRST (small amount, shorten life, etc) only then can you apply to unlock a portion and transfer to RSP? Sorry, I read the table as posting 2 pieces of information and am making sure that I understand it correctly... as I am currently planning my retirement. Thank you
If you meet any of the 1st criteria, then you could potentially unlock 100%. If you don't meet that criteria then potential for unlocking based on province or territory you live.
Hi Adam, great content, love your videos! I am 59 years old and I have a very large LIRA that is registered in BC so unfortunately I don't have allot of options for unlocking early. Other than the options you have already discussed in this video; I have read and been told by my Financial Adviser that providing I have contribution room in my RRSP; I would be able to transfer the difference between the minimum and maximum withdrawal amounts of my LIRA to an RRSP annually. The latter option is not spoken about in your video. Are you able to confirm this unlocking strategy is a viable one? Thanks!
Tracey, yes you can - but also look to pull the max annually and deposit to your TFSA or non-reg and see what the greatest tax benefit is for you. Everyone will be different, but this is typically a great (and better) way to do it.
You didn’t mention the tax implications when you move your pension to a Lira $300.000 pension example you have to take $80.000 in cash minus tax so I have been told
I have talked to my advisor and he said I can’t unlock my lira to my rrsp.I live in Saskatchewan they said it has to be transferred to a locked in rsp. Are they wrong thanks
They are wrong - will go to a PRSP/PRIF, but has the full flexibility of a RRIF/RRSP
I was just researching this topic earlier this afternoon! We have as a couple 40%ish retirement savings in LIRAs and now that we are in our mid to late 50s we are considering our early retirement income options. Thanks for your videos and this particularly timely one!
That is awesome!
Is there a maximum Dollar amount for a 1 time LIRA transfer?
Nope
Hi Adam, thanks for the great overview. It seems that releasing funds in a tax-effective manner is as important as accumulating them. Many great points to consider in retirement. Thanks!