Self-Directed Life Income Fund (LIF)

A Life Income Fund (LIF) is used to convert your locked-in pension savings (from sources like former employer pensions or a Locked-in Retirement Account (LIRA) or Locked-in Retirement Savings Plan (LRSP)) into a stream of retirement income. You must withdraw a certain percentage each year based on you or your younger spouse's age. In most cases, there is some flexibility for additional withdrawals up to a maximum percentage governed by the applicable pension rules associated with the account.

With a self-directed LIF, you control your investments through self-directed tools and platforms. You can choose how your funds are invested, potentially aligning your strategy with your unique risk tolerance, time horizon, and retirement income goals.

  • Shape your retirement income

    When you retire, continue to stay invested in the market by converting your LRSP or LIRA into a self-directed income fund.

  • Keep your growth momentum

    Grow your locked-in money with tax-deferred benefits while drawing a regular income.

  • Unlock your income potential

    Enjoy the control and flexibility to invest in wide range of investments including stocks, mutual funds, Guaranteed Investment Certificates (GICs), Exchange Traded Funds (ETFs), bonds, etc.

  • Trade securities listed on Canadian and U.S. stock exchanges

    Diversify your portfolio and build balance with access to major stock exchanges across North America.


Am I eligible for a TD Direct Investing LIF?

To open a LIF, you must:

  • Be a Canadian resident with a valid Social Insurance number (SIN), for tax purposes.
  • Have an existing LIF, LRSP, LIRA, or employer pension fund.
  • Of minimum age as defined by the relevant federal or provincial legislation applicable to you.

Things to consider to open a LIF

Comparing RRIF to Life Income Fund (LIF) at TD Direct Investing

Both RRIF and LIF are designed to help fund your retirement

RRIF

LIF

Primary source of funds
Usually created by converting a Registered Retirement Savings Plan (RRSP) or an employer pension plan (non locked-in assets)
Usually created by converting a locked-in retirement account (LIRA/LRSP), locked-in RRSP, or an employer pension plan (Locked in assets)
Minimum age requirement
Must be of age of majority in your province
Age limit varies by pension jurisdiction
Withdrawal limit
Has minimum withdrawal requirement but no maximum withdrawal limit
Has a minimum and maximum withdrawal limit based on certain criteria and varies by pension jurisdiction.
Tax on Withdrawals
Fully taxable
Fully taxable

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Got questions? We have answers.

The minimum withdrawal is based on your or your younger spouse's age and the value of the fund as of January 1, similar to RRIFs. The maximum withdrawal is set annually based on pension legislation. Generally, maximum LIF withdrawal is based several factors, such as the market value of the LIF at January 1 and the applicable age. There are other factors which vary by pension jurisdiction. 


LIF pension regulations, including withdrawal limits and unlocking options, can vary significantly by provincial or federal jurisdiction. It's important to consult the specific rules applicable to your LIF or LIRA/LRSP to ensure compliance and to understand your options.


Yes, you can transfer funds from one LIF to another LIF that you own, as well as to a RRIF, in certain circumstances.


In most provinces, you can use your spouse or common law partner's age to calculate your minimum withdrawal amount. This must be set-up when you transition your Locked-In Retirement Account (LIRA) or Locked-In Retirement Savings Plan (LRSP) to a LIF. You can not change this option in the future. 


If you die, your spouse or common-law partner (if applicable) is generally entitled to the funds and may be eligible to transfer the remaining balance to their own LIF, RRIF or RRSP depending on their age and applicable pension legislation. If there is no spouse or common-law partner, the remaining balance is paid to your designated beneficiary or estate.


Related article

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  • Apply online

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