LIRA (Locked-In Retirement Account)

Where a LIRA comes from

You do not open a LIRA the way you open an RRSP. A LIRA exists for one reason: you left an employer before retirement and took your pension's commuted value, the lump sum today's dollars equivalent of the pension you had earned. That most often happens with a defined benefit pension, but locked-in money from a defined contribution plan lands in a LIRA too.

Pension law insists that money set aside for retirement stays set aside for retirement. So the lump sum cannot go into a regular RRSP where you could cash it out on a whim. It transfers, tax-free, into a locked-in account that carries the pension's rules with it. In Québec, the same account is called a CRI (compte de retraite immobilisé) and follows Retraite Québec's rules.

Locked really does mean locked

Inside, a LIRA behaves exactly like an RRSP: it can hold the same investments (stocks, ETFs, GICs, bonds), everything grows tax-deferred, and you choose the financial institution and manage it yourself if you like.

The differences are at the edges. You can make no new contributions, ever; the account only holds what the pension transferred in, plus growth. And you cannot simply withdraw money when you feel like it, not for a house, not for an emergency, not at all in the ordinary course. The Home Buyers' Plan and Lifelong Learning Plan do not apply to LIRAs either.

Whose rules apply? The jurisdiction question

A LIRA is governed by the pension legislation of the plan it came from, not by where you live now. Money from an Ontario-regulated pension follows Ontario rules even if you retire in Nova Scotia. Federally regulated employment (banks, airlines, telecoms) produces federal locked-in accounts under the Pension Benefits Standards Act. A Québec-regulated pension produces a CRI under Retraite Québec's rules.

This matters because the unlocking options, the earliest age you can start income, and the withdrawal maximums all vary by jurisdiction. The first question to answer about any LIRA is: which law governs it? Your account paperwork or the administrator can tell you.

Turning a LIRA into retirement income

When you are ready to draw income, usually from age 55 depending on the jurisdiction, you have two main routes: convert the LIRA to a LIF (Life Income Fund) or buy a life annuity from an insurance company. Like an RRSP, a LIRA must be converted by December 31 of the year you turn 71 (as of July 2026).

A LIF works like a RRIF with a ceiling. It has the same age-based minimum percentages, see the RRIF minimum withdrawal table, but most jurisdictions also impose an annual maximum, so you cannot drain the account quickly. The maximum formula varies by jurisdiction, and Québec removed the maximum for LIF holders aged 55 and over in its recent reforms (as of July 2026).

Unlocking: the exceptions, which vary by jurisdiction

Every jurisdiction allows some money out of the locked-in system early, but the menu differs. Common categories (as of July 2026):

• Small balances: if the account is below a threshold tied to the Year's Maximum Pensionable Earnings, often once you reach a certain age, you can unlock the whole thing.
• One-time 50% unlocking: federal rules and several provinces (including Ontario, Alberta and Manitoba) let you move up to half the balance into a regular RRSP or RRIF when you convert to a LIF. Québec does not offer 50% unlocking, but its flexible LIF withdrawal rules from age 55 serve a similar purpose.
• Financial hardship: low income, risk of eviction, or high medical costs can qualify in some jurisdictions.
• Shortened life expectancy: a physician's certification can unlock the account.
• Non-residency: typically after two years of non-residence in Canada, confirmed by the CRA.