Locked-In Retirement Account

A Locked-In Retirement Account (LIRA), also known as a locked-in RRSP, is an investment tool specially designed to receive the amounts acquired under a pension or retirement plan. When workers leave their jobs, the locked-in amounts accumulated in their pension plans can be transferred to a LIRA. As with an RRSP, this financial tool allows a plan member to accumulate income on a tax-deferred basis. Unlike a RRSP, however, funds cannot be withdrawn from a Locked-In Retirement Account prior to retirement. In addition, a LIRA must be converted into an annuity, Life Income Fund, or other type of retirement instrument no later than December 31 of the year the member turns 69. A Locked-In Retirement Account is a good add-on to a group RRSP to consolidate one's savings for retirement.