Personal Retirement & Savings:
Registered Retirement Income Fund/Life Income Fund (RRIF/LIF)
A Registered Retirement Income Fund converts your non locked-in retirement savings into regular income payments that you can use during your retirement. Likewise, a Life Income Fund converts locked-in retirement savings into regular income payments that can be used during your retirement years.
Why do I need a Registered Retirement Income Fund/Life Income Fund?
- Easily control your investments with various investment options
- You have control over your income, taking out what you want, when you want it, as long as it meets the minimum withdrawal requirement
- Enjoy a maximized tax deferral, since the income is only taxed when it’s taken out of the plan
- Assets can be passed on directly to your spouse in the case of death without being taxed
Should you leave a job where you had a pension plan, sometimes you can either leave the pension money in the pension plan or transfer it into a Locked-in Retirement Account (LIRA) or a locked-in Registered Retirement Savings Plan (RRSP). This is usually locked-in and cannot be withdrawn until you start retirement. After a certain age, determined by province, you can begin receiving income from this pension money by converting it into a Life Income Fund (LIF). There is a maximum that you can withdraw each year, but this is to ensure that the money will last well into your retirement.
When individuals are ready to start spending their RRSPs, many people move their money to an Registered Retirement Income Fund. This provides a choice in how the money is invested. You can choose from guaranteed investments (like GICs), mutual funds, segregated funds, and other options that take into consideration your risk tolerance and overall financial plan.
Registered Retirement Income Funds (RRIF’s): issued by Sun Life Assurance Company of Canada