Life Income Funds, Restricted Life Income Funds, and Variable Benefits Accounts
Information
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Are there minimum or maximum amounts that can be withdrawn from a life income fund (LIF), restricted life income fund (RLIF) and variable benefit account?
LIFs and RLIFs are personal retirement income funds that provide periodic retirement income to the holder. A variable benefit account is similar to a LIF but provides retirement income directly from a pension plan with defined contribution provisions.
The periodic income from a LIF, RLIF or variable benefit account is subject to minimum and maximum annual withdrawal limits. The minimum annual withdrawal amount is determined under the Income Tax Regulations and the maximum annual withdrawal amount is determined under the Pension Benefits Standards Regulations, 1985. The maximum annual withdrawal limit is intended to maintain a retirement income for the fund or account holder or their survivor, as the case may be, until at least the age of 90.
Please see question 2 for the current maximum amounts payable from a LIF, RLIF or variable benefit account.
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How much money can be withdrawn from a life income fund (LIF), restricted life income fund (RLIF) or variable benefit account?
Note: Where information provided below conflicts with the Pension Benefits Standards Act, 1985 (PBSA) or Pension Benefits Standards Regulations, 1985 (PBSR), the PBSA or PBSR will govern.
In determining the maximum annual amount of income that may be paid in a given calendar year from a LIF, RLIF or variable benefit account, sections 20.1, 20.3 or 21.1 of the PBSR respectively, require that the following interest assumption be used:
- the monthly average yield on Government of Canada marketable bonds of maturity over 10 years as published by the Bank of Canada (also referred to as Series V122487) for the preceding month of November for the first 15 years
- 6.00% for the years remaining to the end of the year in which the fund or account holder or their survivor, as the case may be, attains 90 years of age.
For the calendar year in which the contract or arrangement is first entered into, the maximum annual amount of income that may be paid must be multiplied by the number of months remaining in that year divided by 12, with any part of an incomplete month counting as one month.
Table 1 below includes information required to determine the maximum annual amount of income that may be paid in 2024. The maximum annual amount of income for 2023 is also provided in Table 2 for your information.
Table 1 – Maximum annual amount of income that may be paid in 2024 Table note 1
LIF, RLIF and variable benefit account
November 2023 Series V122487 rate: 3.39%Age on December 31, 2023 Percentage of LIF, RLIF or variable benefit account balance as at January 1, 2024 20 4.4880% 21 4.4933% 22 4.4989% 23 4.5048% 24 4.5111% 25 4.5178% 26 4.5250% 27 4.5326% 28 4.5406% 29 4.5492% 30 4.5584% 31 4.5681% 32 4.5784% 33 4.5895% 34 4.6012% 35 4.6137% 36 4.6271% 37 4.6413% 38 4.6565% 39 4.6727% 40 4.6900% 41 4.7084% 42 4.7282% 43 4.7493% 44 4.7718% 45 4.7960% 46 4.8219% 47 4.8496% 48 4.8794% 49 4.9114% 50 4.9457% 51 4.9826% 52 5.0223% 53 5.0651% 54 5.1113% 55 5.1612% 56 5.2152% 57 5.2736% 58 5.3370% 59 5.4059% 60 5.4809% 61 5.5626% 62 5.6520% 63 5.7500% 64 5.8576% 65 5.9762% 66 6.1072% 67 6.2525% 68 6.4142% 69 6.5951% 70 6.7983% 71 7.0278% 72 7.2886% 73 7.5871% 74 7.9315% 75 8.3323% 76 8.7916% 77 9.3230% 78 9.9444% 79 10.6804% 80 11.5655% 81 12.6492% 82 14.0061% 83 15.7533% 84 18.0860% 85 21.3552% 86 26.2637% 87 34.4506% 88 50.8334% 89 100.0000% Table 2 – Maximum annual amount of income that may be paid in 2023 Table note 1
LIF, RLIF and variable benefit account
November 2022 Series V122487 rate: 3.02%Age on December 31, 2022 Percentage of LIF, RLIF or variable benefit account balance as at January 1, 2023 20 4.3237% 21 4.3288% 22 4.3343% 23 4.3401% 24 4.3463% 25 4.3528% 26 4.3598% 27 4.3673% 28 4.3752% 29 4.3836% 30 4.3925% 31 4.4021% 32 4.4122% 33 4.4230% 34 4.4345% 35 4.4468% 36 4.4599% 37 4.4738% 38 4.4887% 39 4.5046% 40 4.5216% 41 4.5397% 42 4.5590% 43 4.5798% 44 4.6019% 45 4.6256% 46 4.6510% 47 4.6783% 48 4.7075% 49 4.7389% 50 4.7726% 51 4.8089% 52 4.8480% 53 4.8901% 54 4.9355% 55 4.9846% 56 5.0377% 57 5.0953% 58 5.1577% 59 5.2256% 60 5.2996% 61 5.3803% 62 5.4686% 63 5.5654% 64 5.6718% 65 5.7891% 66 5.9189% 67 6.0630% 68 6.2236% 69 6.4035% 70 6.6057% 71 6.8346% 72 7.0952% 73 7.3940% 74 7.7395% 75 8.1429% 76 8.6048% 77 9.1390% 78 9.7634% 79 10.5025% 80 11.3910% 81 12.4785% 82 13.8397% 83 15.5919% 84 17.9305% 85 21.2075% 86 26.1266% 87 34.3299% 88 50.7438% 89 100.0000% Table notes
- Table note 1
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If the minimum withdrawal amount specified in the Income Tax Regulations exceeds the maximum amount of income that may be paid in accordance with the table, the maximum amount of income that should be paid from a LIF, RLIF or variable benefit account is equal to the minimum withdrawal amount.
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Does the amount of income permitted to be withdrawn from an existing life income fund (LIF), restricted life income fund (RLIF) or variable benefit account increase in a given calendar year if money is transferred from a locked-in registered retirement savings plan or pension plan during the year?
No. Sections 20.1, 20.3 and 21.1 of the Pension Benefits Standards Regulations, 1985, provide that the maximum annual amount of income that may be paid in a given calendar year will be calculated based on the balance of the fund at the beginning of the year.