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 The life income fund (LIF) cannot be withdrawn in a lump sum; rather, owners must use the fund in a manner that supports retirement income for their lifetime.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

    A form of a trust that provides pension benefits for an employee ...
  3. Registered Retirement Income Fund ...

    A retirement fund similar to an annuity contract that pays out ...
  4. Canada Revenue Agency - CRA

    A federal agency that collects taxes and administers tax laws ...
  5. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
  6. Canada Pension Plan - CPP

    One of three levels of Canada's retirement income system, which ...
RELATED FAQS
  1. What is the Superintendent's Register of Authorized Institutions?

    The Superintendent's Register of Authorized Institutions is a list kept by the Office of the Superintendent, which details ... Read Full Answer >>
  2. Where can I transfer money from a Locked-in Retirement Account (LIRA) to?

    Money from a Locked-in Retirement Account, or LIRA, may be transferred to another LIRA, an insurance company in order to ... Read Full Answer >>
  3. Should a Canadian citizen who lives and works in the U.S. continue to contribute ...

    No, a U.S. resident should not contribute to a RRSP account. RRSP contribution rules allow you to contribute a certain percentage ... Read Full Answer >>
  4. What are the financial benefits of retiring in the Philippines?

    Of those countries considered friendly to the United States, the Philippines has one of the lowest standards of living and ... Read Full Answer >>
  5. Do I need to file an income tax return every year?

    Contrary to popular belief, there are indeed situations where a person does not need to file a tax return every year. For ... Read Full Answer >>
  6. How does a pension income drawdown work?

    While there are similar drawdown plans in the United States, a pension income drawdown plan most commonly refers to a specific ... Read Full Answer >>
Related Articles
  1. Savings

    Tax-Saving Tips For Canadian Taxpayers

    Find out how to get a bigger return.
  2. Retirement

    Tax Breaks For Canadian Families

    Canadians have a lot of advantages when it comes to family tax perks.
  3. Taxes

    Tax-Free Accounts Make Saving A Snap For Canadians

    In 2009, the Canadian government began allowing citizens to save more tax-free dollars than ever.
  4. Retirement

    Maxing Out Your RRSP (Canadian)

    Increasing your savings will provide tax benefits - and peace of mind.
  5. Taxes

    Registered Retirement Savings Plans (RRSP)

    Learn how the Canadian government makes saving for your post-work years easy. We take you from your first contribution to your first withdrawal.
  6. Investing Basics

    Understanding Open-End Funds

    An open-end fund is a type of mutual fund that does not limit the amount of shares it issues, but issues as many shares as investors are willing to buy.
  7. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  8. Professionals

    Why Retirement Planning Differs for Women

    Women face unique challenges when it comes to saving for retirement compared to men. Here's why and how to better prepare.
  9. Mutual Funds & ETFs

    Why You May Want To Be (And Stay) In Bonds

    Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor.
  10. Professionals

    5 Signs That You Have a Lousy 401(k) Plan

    Knowing whether a 401(k) plan is good or not so good is important. This will help participants decide how much to invest and when to demand improvements.

You May Also Like

Hot Definitions
  1. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  2. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  3. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  4. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
Trading Center