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Locked-In Retirement Account / Registered Retirement Income Fund

Are you approaching your 70s and hold a Locked-In Retirement Account or Registered Retirement Income Fund (LIRA/RRIF)? A Locked-In Retirement Account (LIRA) or Registered Retirement Income Fund (RRIF) lets you continue to defer tax while your retirement funds grow.

Our investment advisers can discuss your best options for payment streams and help you choose the right mix of investments to turn your retirement savings into an LIRA/RRIF.

LIRA

If you changed jobs and want options to manage your previous employer’s Registered Pension Plan, a Locked-In Retirement Account (LIRA) is a great investment plan to consider!

What is it?

A LIRA is the holding account for past pension funds. Essentially, this account is used to hold funds originally held in a provincial or federal registered pension plan.

Who is it for?

It is critical to consult your Financial Planner to ensure compliance with the applicable law(s). Your Financial Planner will help you develop an investment strategy to best meet your financial fitness goals.

What are the benefits?
  • Income earned within a LIRA is sheltered from taxation until withdrawal.
  • Your investment income can include interest, dividends and capital gains.
  • While more restrictive than funds held in other registered plans, like RRSPs, owners of LIRA accounts have more control over the management of the funds both during the accumulation and disbursement stage.
  • Subject to regulatory requirements, under certain circumstances there is an available one-time ‘unlock’ of up to 50 per cent of the value of LIRA, which allows the plan holder to have access to funds, allowing for more options and flexibility to the consumer.

RRIF

Turn your RRSPs into retirementincome through a Registered Retirement Income Fund (RRIF)!

What is it?

A RRIF is an investment option for Registered Retirement Savings Plan (RRSP) holders to start collecting retirement income.

Who is it for?

If you hold an RRSP, you can convert the funds to a RRIF any time before you turn 71. At a minimum, RRSPs must be converted to RRIFs by December 31st of the year the plan holder turns 71. Talk to a Financial Planner today about this investment and develop an investment strategy to best meet your financial fitness goals.

What are the benefits?
  • Income earned within a RRIF is sheltered from taxation until withdrawal.
  • Your investment income can include interest, dividends and capital gains.
  • While there are prescribed guidelines for minimum withdrawals (that continue to increase as the plan holder ages), management of withdrawal amounts can be increased to suit individual lifestyle. There are no restrictions on the upper limit of withdrawals.
  • By choosing your spouse or partner as your beneficiary, funds can be rolled over into their name without immediate tax consequence if you were to pass away. Rollovers are not subject to probate, which is the court process by which a Will is proved valid (or invalid).

If you’d like more information regarding LIRA/RRIF’s, make an appointment with a Financial Planner today. Contact us today at 1-877-WESTOBA or FinancialPlanning@westoba.com.

 

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