Overview
A Locked-in Retirement Account (LIRA) is an account designed to hold a former pension plan member’s funds from a locked-in pension. Typically, people who aren't yet retired will open a LIRA after leaving a job with a pension.
At retirement, you can use LIRAs to purchase retirement income (through LIFs, which are similar to RRIFs) or convert it to an annuity. Like an RRSP, a LIRA must be closed by December 31 of the year that you turn 71.
Deposits and withdrawals
Since funds are locked in, you can't deposit funds into or withdraw from a LIRA. You can only fund a LIRA by transferring in an existing LIRA/locked-in portion of a pension or moving funds between LIRA accounts.
Types of LIRAs on Wealthsimple
You can open managed and self-directed investing LIRAs on Wealthsimple:
- You can open as many managed LIRAs as you like.
- You can open up to 8 self-directed LIRAs.
How to open a LIRA
Before you open a LIRA, please check the jurisdiction of your LIRA or pension. The jurisdiction of a new LIRA must match the jurisdiction of the LIRA or pension where the funds are coming from. You can usually confirm the jurisdiction on your account statement, pension package, or with your plan administrator.
To open a LIRA with Wealthsimple, follow these steps:
- Log in to the Wealthsimple mobile app
- Under Accounts, scroll down and select + Add an account
- Select Open a new account
- Choose the LIRA account type
- Review if this account is right for you, then tap Next
- Select your Jurisdiction (make sure it matches the jurisdiction of the LIRA or pension where the funds are coming from) and tap Next
Tip: If you're unsure which jurisdiction your account was created in, you can check your account statement or reach out to your financial institution for help - Choose the age you wish to retire and tap Continue
- Choose a theme for your portfolio and tap Continue
- Confirm your risk level
- Review your agreements and Confirm your account opening
- Log in to your Wealthsimple account
- Select + Add an account from the Home page
- Select the Investing tab
- Choose LIRA from the options
- Choose how you'll use the account (Managed portfolios or Self-directed investing)
- Select Next
- Follow the prompts to open a LIRA
Frequently asked questions
Can I withdraw from my LIRA?
Early withdrawals from a LIRA account may be permitted if the account holder experiences financial hardship (such as having a low income, medical emergency, etc.) or non-financial hardship (such as becoming a non-resident, a shortened life expectancy, etc.).
The jurisdiction of your LIRA determines the criteria for early withdrawals through unlocking. Please contact our support team if you have any questions.
What are the fees in a managed LIRA with Wealthsimple?
Wealthsimple's standard management fee is 0.5%. For accounts over $100,000, this fee drops down to 0.4%. Learn more about fees.
Can I hold cash in a managed LIRA instead of investing my funds?
No, there is no option to hold cash in managed accounts. However, you can consider moving your portfolio to our high-interest savings ETF option for a no-risk investing alternative.
Can I change the jurisdiction of my LIRA?
No. You must open a new LIRA and select the correct jurisdiction.
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