Locked-In Retirement Account - LIRA

DEFINITION of 'Locked-In Retirement Account - LIRA'

A type of registered retirement savings alternative that locks in the pension funds in investments. While the funds are locked in, they are unavailable for cash-out. Pension funds that are transferred to a LIRA are used to purchase a life annuity, transferred to a life income fund (LIF) or to a locked-in retirement income fund (LRIF). Upon reaching the retirement age, the life annuity, LIF and/or LRIF provide a pension for life.

BREAKING DOWN 'Locked-In Retirement Account - LIRA'

The locked-in retirement account is designed to hold pension funds for a former plan member, former spouse or common-law partner or a surviving spouse or partner. The LIRA may be elected at any age to hold funds transferred from a pension plan upon the termination of membership in a pension plan; the disintegration of a marriage or common-law partnership; or death before retirement. Unlike RRSPs, which can be cashed in whenever the owner decides, a locked-in retirement account does not provide such an option.

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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 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 >>
  5. What is the Superintendent's Register of Authorized Institutions?

    Learn who governs locked-in retirement accounts and other registered retirement savings plans in each Canadian province and ... Read Answer >>
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    Learn about some of the primary differences between the benefits of provident funds and pension funds, two types of retirement ... Read Answer >>
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