A locked-in retirement account (LIRA) is a retirement savings program where you can deposit all funds acquired from a pension plan. When you leave a job, your accumulated pension fund may be transferred to a LIRA.
What is a LIRA?
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The purpose of a LIRA is to provide for accumulation of pension money outside a pension plan.
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Withdrawals from a LIRA can be difficult since these are locked in accounts. Unlike a Registered Retirement Savings Plan (RRSP) you are not permitted to use funds from your LIRA for going back to school or as part of a down payment for a home.
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With a LIRA plan, you enjoy an income tax deferral on all your investment returns
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According to the regulations, you cannot redeem money from your LIRA account under any circumstance unless it’s converted to a life income fund (LIF), or any other retirement income plan before 31st December of the year you will turn 71.
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LIRA is regulated by pension laws.
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