A LIRA (locked-in retirement account) holds pension money moved out of a workplace pension plan, and a LIF (life income fund) pays it out as retirement income, both with limits on how much you can take out.
When you leave an employer and move your pension's value out of the plan, pension law usually keeps the money locked in so it's used for retirement income. A LIRA works like an RRSP you can't withdraw from at will, and like an RRSP it has to be converted by the end of the year you turn 71, usually to a LIF.
A LIF works like a RRIF with a ceiling: there's a minimum withdrawal each year and also a maximum. In Ontario, the maximum is the greater of an age-based percentage of the balance and the fund's investment earnings for the previous year.
The rules depend on which law governs the original pension: the province where you worked, or federal law for federally regulated employers. Ontario, for example, lets you unlock up to 50% of money transferred into a new LIF, and allows withdrawals for financial hardship such as medical costs, rent arrears or low expected income.
How to check
Your LIRA or LIF statement should name the pension law that governs it. That jurisdiction's pension regulator, such as the Financial Services Regulatory Authority of Ontario (FSRA), publishes its unlocking and withdrawal rules.
Sources
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