The LIF option What is a LIF? A Life Income Fund (LIF) is a registered income product. It allows its annuitant to maintain investments on a tax-sheltered basis and must be purchased with locked-in funds from a Registered Pension Plan, locked-in RRSP or Locked-In Retirement Account (LIRA). The total of all payments from a LIF must fall between minimum and maximum annual amounts determined by legislation. Each year (beginning the year after you open a LIF), you must begin receiving a minimum amount of income as determined by Canada Revenue Agency (CRA). This minimum depends on the value of the LIF at the start of the year and on your age. The maximum annual withdrawal is calculated beginning the year the plan is purchased. Maximums are based on a formula established by pension legislation and vary by province. The formula produces maximum withdrawal percentages for each year based on the annuitant's age. LIF minimum/maximum withdrawal percentage chart Payments received from a LIF are taxable and must be included as income in the year they are received. Although you cannot make contributions to a LIF, you can transfer registered money in to a LIF at any time provided it comes from a locked-in source. Differences between RRIFs and LIFs A LIF has a legislated maximum and minimum income payment. A RRIF only prescribes a minimum payment amount. Some provinces require a LIF to be converted to a life annuity by the end of the year in which its annuitant turns 80, while a RRIF can continue for the balance of the annuitant's lifetime. For more details about LIFs, see the Retirement Income Options. This option might be right for you if you have locked-in funds and your retirement goals are… Maintaining control over investments - you want to continue to manage your investments. Flexible income payments - you want the flexibility to control payment details, including payment frequency, amount and withholding tax details. Convenience - you want the convenience of regular income payments but also want the flexibility to make additional lump sum withdrawals.