Life Income Fund - LIF

AAA

DEFINITION of 'Life Income Fund - LIF'

In Canada, a type of registered retirement income fund that is used to hold pension funds, and eventually payout retirement income. The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that supports retirement income for their lifetime. Each year's Income Tax Act specifies the minimum and maximum withdrawal amounts for LIF owners, which takes into consideration the LIF fund balance and the owner's annuity factor.

INVESTOPEDIA EXPLAINS 'Life Income Fund - LIF'

LIF owners are not required to purchase a life annuity, buy may choose to do so at any age. A LIF owner may also choose to transfer funds to another LIF, a locked-in retirement income fund (LRIF) or in certain cases to a locked-in retirement account (LIRA). The financial institution from which the LIF is issued must provide an annual statement to the LIF owner. Based on the annual statement, the LIF owner must specify at the beginning of each fiscal year the amount of income he or she would like to withdraw. This must be within a defined range to ensure the account holds enough funds to provide lifetime income for the LIF owner.

RELATED TERMS
  1. Form 8891

    An IRS form that must be completed by any U.S. citizen or resident ...
  2. Canada Revenue Agency - CRA

    A federal agency that collects taxes and administers tax laws ...
  3. Canada Pension Plan - CPP

    One of three levels of Canada's retirement income system, which ...
  4. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
  5. Registered Retirement Income Fund ...

    A retirement fund similar to an annuity contract that pays out ...
  6. Registered Pension Plan - RPP

    A form of a trust that provides pension benefits for an employee ...
Related Articles
  1. Tax-Saving Tips For Canadian Taxpayers
    Savings

    Tax-Saving Tips For Canadian Taxpayers

  2. Tax Breaks For Canadian Families
    Retirement

    Tax Breaks For Canadian Families

  3. Should a Canadian citizen who lives ...
    Retirement

    Should a Canadian citizen who lives ...

  4. Maxing Out Your RRSP (Canadian)
    Retirement

    Maxing Out Your RRSP (Canadian)

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center