Page 99 - A Canuck's Guide to Financial Literacy 2020

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4. Submit your pension package along with the LIRA/LRSP account number to your
former company
5. The former company would proceed to move the accumulated pension funds to your
LIRA/LRSP

6. Start investing the funds in a portfolio that is in accordance with your risk appetite and
risk tolerance.

Similar to RRSPs, funds in LIRAs are able to accumulate tax deferred until withdrawn. In
most provinces, LIRA account holders can start withdrawing regular income as early as 55.

Creditor Protection

When you open a LIRA, you can be comfortable of the thought that they can’t be accessed
by creditors, however, keep in mind that under certain circumstances such as marriage
breakdown, LIRAs may have to be split with your spouse or common law partner.

Naming a Beneficiary

The beneficiary can be your spouse, common law partner, estate or another individual. If
you wish to name a beneficiary someone other than your spouse or common law partner,
your spouse/common law partner must complete a waiver and give up their right to your
locked-in funds. If you don’t have a spouse, then you can designate a beneficiary of your
choosing.

Withdrawing from your LIRA

If you’re looking to withdraw from your LIRA, you must complete applicable forms and meet
certain requirements that vary province by province. As each province differs in terms of
criteria, we’ve listed below common themes that you may withdraw for. Depending on the
jurisdiction that the LIRA is subject to, funds can be accessed via

▪ Financial Hardship or
▪ Non-Financial Hardship

Financial Hardship Jurisdictions
Low Expected Income Federal
Ontario
Individuals can complete one unlocking British Columbia
application per year for low expected Alberta
income. Spousal consent would be needed. Nova Scotia
Rent/Mortgage in Arrears Ontario
British Columbia
Individuals behind on their mortgage