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.

RELATED TERMS
  1. Life Income Fund - LIF

    In Canada, a type of registered retirement income fund that is ...
  2. Pension Fund

    A fund established by an employer to facilitate and organize ...
  3. Unfunded Pension Plan

    An employer managed retirement plan that uses the employer's ...
  4. Pension Option

    A set of options that a pensioner has in regard to the handling ...
  5. Pension Adjustment Reversal - PAR

    A numerical calculation in certain Canadian pension plans that ...
  6. Pensionable Service

    The period of service, expressed in a yearly figure, for which ...
Related Articles
  1. Financial Advisor

    What are Pension Funds?

    A pension fund is a company-sponsored fund that provides income for employees in retirement.
  2. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  3. Retirement

    Retirement Plans From Around The World

    How does the rest of the world stack up against the U.S. when it comes to planning and saving for retirement?
  4. Managing Wealth

    How Pensions, Social Security Differ

    Both pensions and Social Security provide an income stream to retirees, but they differ widely on how they're structured and funded. Here's the lowdown.
  5. 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.
  6. Financial Advisor

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  7. Retirement

    Can Your Pension’s Cost-of-Living Clause Be Frozen?

    Recent events in New Jersey prove that relying on a pension alone to fund your retirement is risky. Make sure you have multiple retirement income sources.
  8. Financial Advisor

    How to Help Clients Navigate Pension Payments

    Financial advisors play a key role in helping clients make critical pension decisions. Here are some tips to help clients make the right choices.
  9. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  10. Retirement

    America's Frozen Pension Dilemma

    Unfortunately, there are several factors that have eroded the presence of pension plans in America, and workers need to be prepared to replace that expected income for their retirement years. ...
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. What happens to my Locked-In Retirement Account (LIRA) balance when I die?

    Understand that in the event of your death, Locked-In Retirement Account death benefits will be transferred to your partner, ... Read Answer >>
  6. 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. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center