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 The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that supports retirement income for their lifetime.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. Where can I transfer money from a Locked-in ...
    Retirement

    Where can I transfer money from a Locked-in ...

  2. What is the Superintendent's Register ...
    Retirement

    What is the Superintendent's Register ...

  3. Tax-Saving Tips For Canadian Taxpayers
    Savings

    Tax-Saving Tips For Canadian Taxpayers

  4. Tax Breaks For Canadian Families
    Retirement

    Tax Breaks For Canadian Families

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center