Skip to main content
Login

Self-Directed Locked-In Retirement Account (LIRA)†

A LIRA (also known as a Locked-in Retirement Savings Plan (LRSP) in some provinces) is a type of retirement savings account designed to hold pension funds from previous employers. These funds can grow tax-deferred within the LIRA/LRSP until you begin withdrawing them after you retire. The funds in a LIRA/LRSP are locked-in, meaning you cannot contribute to the account after you've left your employer. There are some specific circumstances under which you may make a withdrawal before retirement, but they are rare. In a Self-Directed LIRA/LRSP you can choose how your pension funds are invested, from a wide selection of choices, giving you flexibility and control.

  • Grow your pension fund, defer taxes

    If you changed jobs and were part of a pension plan, your pension assets can be transferred to a LIRA/LRSP and potentially continue to grow on a tax-deferred basis.

  • Plan your retirement your way

    Enjoy control and flexibility by aligning investments with your unique risk tolerance, time horizon, and retirement goals. 

  • Locked plan, unlocked potential

    Like with a Registered Retirement Savings Plan (RRSP)†, you can invest in a wide range of assets and adapt your investment strategy as per your circumstances.

  • Trade across markets in Canada and the U.S.

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

Am I eligible for a TD Direct Investing LIRA/LRSP?

To open a LIRA/LRSP, you must:

  • Be a Canadian resident with a valid Social Insurance Number (SIN), for tax purposes.
  • You must have funds from a previous employer pension plan to transfer into a LIRA/LRSP.
  • Be under 71 years. You must convert your LIRA/LRSP to a Life Income Fund (LIF) Locked-In Retirement Income Fund (LRIF) or another eligible option before December 31 of the year you turn 71.
  • Be the age of majority in your province. 

Things to consider when opening a LIRA/LRSP 

Comparing LIRA/LRSP to RRSP at TD Direct Investing

Both LIRA/LRSP and RRSP are designed to support you during retirement but there are some key differences between the two.

LIRA/LRSP

RRSP
Primary purpose
Retirement and certain eligible withdrawals 
Generally, for retirement, and eligible Home Buyers Plan (HBP) or eligible Lifelong Learning Plan (LLP) withdrawals 
Source of funds
Employer registered pension fund 
Pretax income: 18% of previous year’s earned income (maximum limits apply), less pension adjustments + unused RRSP contribution room 
Is there an annual contribution limit
Contributions are locked, only transfers permitted
Yes
Tax impact on contributions 
Not applicable, only transfers permitted

Eligible contributions are tax-deductible 

 

 
Growth
Tax-deferred
Tax-deferred
Withdrawals
Eligible withdrawals are subjected to withholding tax.
Eligible withdrawals are subjected to withholding tax.

Investment choices

Stocks

Mutual Funds

Fixed Income

ETFs

GICs

 

Explore an affordable way to start saving for your retirement

Start building towards your goal of retirement by investing with partial shares trading. 

Find out more

Got questions? We have answers.

You need to close your LIRA/LRSP accounts by December 31 of the year in which you turn 71. At that point, you must choose one of the following options for your LIRA/LRSP:

-       Transfer the funds to a LIF/LRIF. This won't trigger a tax event, but you will need to start taking minimum payments (which will be taxed as income),starting in the year after you open the LIF/LRIF account.

-       Use the funds to purchase an annuity with an insurance company. 

Funds from a LIRA/LRSP cannot be directly transferred to a RRIF, though some exceptions exist.

Upon reaching the age of 71, you must generally convert your LIRA/LRSP to a LRIF/LIF, or a Life Annuity. However, there are certain exceptions under relevant provincial pension legislations.

Unlocking funds from LIRA/LRSP are guided by pension legislation to determine how much you can unlock and when. Depending on your province, up to 50% of your LIRA/LRSP could be unlocked at the age of 55. However, there are exceptions, which may apply if you meet certain conditions. For more information, please visit Government of Canada site here.

Provincial and federal pension legislation restrict the cash-out of pension benefits to ensure that members of a pension plan have an income for life. However, there are special considerations that can allow withdrawals to be made prior to age 55 depending on the pension legislation. They can include a shortened life expectancy, financial hardship, low balance or becoming a non-resident of Canada.

Besides LIRA/LRSP, TD Direct Investing also offers Self-Directed Locked-in Retirement Savings Plan (LRSP)† and Restricted Locked-in Retirement Savings Plans (RLSP)†, LIF, Restricted Life Income Fund (RLIF)†, Prescribed Retirement Income Funds (PRIF)†.

You can hold a variety of investments similar to those allowed in other self-directed registered accounts. These include eligible:

  • Stocks
  • Mutual funds
  • Exchange-traded funds (ETFs)
  • Guaranteed Investment Certificates (GICs)
  • Bonds

Related article

Open an account online – it's fast and easy

Whether you're new to self-directed investing or an experienced trader, we welcome you.

  • Apply online

    It's easy to open a cash, margin, RSP, or TFSA account.

    Open account

  • Call us

    We're here for you. Monday to Friday, 7 am to 10 pm ET

    1-800-465-5463 1-800-465-5463

  • Book an appointment

    Let's chat, face-to-face at a TD location convenient to you.

    Book now

Have a question? Find answers here

Popular Questions