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 The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that supports retirement income for their lifetime.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.

BREAKING DOWN '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. Locked-In Retirement Account - ...

    A type of registered retirement savings alternative that locks ...
  2. Individual Retirement Annuity

    A retirement investment vehicle that is structured similarly ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Years Certain Annuity

    An insurance product that pays the holder a monthly income for ...
  6. 412(i) Plan

    A defined-benefit pension plan designed for small business owners ...
Related Articles
  1. Retirement

    How To Choose A Retirement Income Fund

    Retirees looking for income can choose retirement income funds. But in order to pick the right one, you have to look at investments and fees.
  2. Financial Advisor

    3 Ways Retirees Can Generate Income From Investments

    Retirement can last a long time, which means people not only have to save for retirement but see it generate income. Thankfully there’s lots of ways to do that.
  3. Retirement

    Weave Your Own Retirement Safety Net

    Build savings to support yourself in case pension plans and Social Security fall through.
  4. Retirement

    Retirement Tips for Government Workers

    Discover retirement tips for government workers such as what types of funds to choose, different types of plans, and at what age to retire.
  5. Investing

    Satisfy Your Investment Objectives With Income Funds

    Discover the various categories of income funds and the types of investors for whom they are appropriate.
  6. Financial Advisor

    How to Solve the Retirement Equation

    Make sure you are prepared for retirement by solving the equation of income and expenses.
  7. Financial Advisor

    Top Tips for Retirement Account Withdrawals

    Top things you need to know when it comes to managing the complex task of retirement account withdrawals.
  8. Retirement

    What Is the Best Age to Get an Annuity?

    Optimizing the benefits of an annuity means guaranteeing a stream of income you can't outlive.
  9. Retirement

    Why Retirement Income Now Costs More

    The cost of future lifetime retirement income has outpaced increases in retirement savings balances. That’s left many pre-retirees with lower income.
  10. Investing

    Managed Payout Funds vs. Annuities: A Comparison

    Despite the advantages that they offer over annuities, managed payout funds have been slow to catch on with investors.
RELATED FAQS
  1. Who can transfer funds to a Locked-in Retirement Account (LIRA)?

    Transferring funds into a LIRA account can be initiated by owners of defined contribution plans or defined pension plans ... Read Answer >>
  2. Where can I transfer money from a Locked-in Retirement Account (LIRA) to?

    Transfers of money from a LIRA can be made to another LIRA account, to an LIF account or to an insurance company in order ... Read Answer >>
  3. What are the restrictions for withdrawing my Locked-in Retirement Account (LIRA) ...

    Learn about Locked-in Retirement Funds and options available for receiving retirement income. Explore circumstances when ... Read Answer >>
  4. What are the main benefits of a Locked-in Retirement Account (LIRA)?

    Read about the main benefits you can realize from transferring your Canadian pension funds into a Locked-in Retirement Account, ... Read Answer >>
  5. What happens to a Locked-In Retirement Account (LIRA) in the case of a divorce or ...

    Learn different options in cases of divorce where assets are held in Canadian Locked-In Retirement Accounts. Learn which ... Read Answer >>
Hot Definitions
  1. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  2. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  5. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  6. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
Trading Center