A Life Income Fund (LIF) is an account, similar to a RRIF with the exception that funds are locked-in, that is designed to pay out annual income during your retirement. LIRAs typically convert into LIFs so a LIF allows you to withdraw the funds, within a defined minimum and maximum, that you've previously saved in your LIRA as income.
Before you begin
- You can only open a managed LIF at this time. DIY trading LIFs are not currently available.
- When you open a managed LIF, you can choose a risk level. You can update your risk level at any time.
- People living in Saskatchewan cannot open LIFs. Please contact our support team to learn about your options.
- Jurisdictions may have differing rules to be aware of, such as withdrawal amounts and the age of retirement.
- There is a minimum and maximum withdrawal amount that you must stay within for every year as long as you have a funded LIF. Wealthsimple will help you stay within these limits, and this amount will be added to your total taxable income for the following calendar year.
- You don’t need to withdraw in the first calendar year that the LIF is open and funded from a LIRA rollover.
Funding a LIF with Wealthsimple
Unlike other investment accounts, you cannot add funds directly into a LIF. Instead, you can only fund a LIF by transferring in an existing LIF, or rolling over an existing Wealthsimple LIRA.
Open a LIF with Wealthsimple
Once you’re ready to open an LIF, follow these steps:
- Log in to the Wealthsimple mobile app
- Tap the Home tab at the bottom of your screen
- Select Add an account
- Choose the LIF account type
- Select your Jurisdiction
- Follow the prompts to finish setting up your LIF
Roll over a LIRA into a LIF
You can roll over a LIRA account into a LIF account once you reach retirement age. The retirement age is defined by each jurisdiction. To roll over a LIRA with Wealthsimple into a LIF, contact our support team.
Frequently asked questions
What are the fees in a managed LIF with Wealthsimple?
Wealthsimple’s standard management fee is 0.5%. For Premium and Generation clients, this fee drops down to 0.4%. To learn more about fees, click here.
Can I hold cash in a managed LIF 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.
How do withdrawals work?
Once you’ve retired, you can withdraw between a min/ max amount under a given frequency in a year under the appropriate tax withholding rules. Only the minimum is mandatory; any sum in excess, up to the maximum, is optional and has tax implications. Learn more about LIF withdrawals.
Does Wealthsimple offer Life Annuities?
Wealthsimple does not currently support Life Annuities.