A Locked-In Retirement Account (LIRA) is a registered account that holds pension money transferred out of a former employer’s registered pension plan. The funds are called locked-in because they cannot be freely withdrawn — they are intended to provide retirement income and are subject to special rules restricting access until retirement.
How a LIRA Works
When you leave an employer before retirement with vested pension benefits, you can transfer the commuted value of your pension into a LIRA. The money grows tax-sheltered but cannot be withdrawn freely. At retirement, a LIRA must be converted to a LIF or used to purchase a life annuity.
Why It Matters in Retirement
The LIRA is often overlooked because it sits separately from an RRSP with different rules. The jurisdiction governing your LIRA is set at the time the pension was earned — not where you currently live — which affects the unlocking rules available to you.
Related Resources
This article provides general financial education for Canadians. It is not personalized financial advice. For guidance specific to your situation, consider speaking with a CFP professional.