With a Life Income Fund (LIF), you have a minimum amount that you must withdraw, as well as a maximum amount that you are allowed to withdraw, each year. Both your minimum and maximum amounts are determined by the government. When you make a withdrawal through Wealthsimple, we’ll help you stay within these limits.
When you withdraw more than your annual minimum, the extra amount you withdraw will be subject to a withholding tax. We'll automatically take the holding tax out of your withdrawal and pay it to the government. The amount of withholding tax we send depends on which province you live in.
|If you withdraw:||Withholding tax rate (excluding Quebec):||Withholding tax rate (Quebec residents):|
|Up to $5,000||10%||20%|
|Between $5,001 and $15,000||20%||25%|
|More than $15,001||30%||30%|
There is no minimum withdrawal amount in the calendar year that you convert your LIRA into a LIF. You won't need to make a minimum withdrawal that year, and any withdrawal that you do make will be subject to a withholding tax.
There will also not automatically be a maximum setup for your account during the calendar year that you convert your LIRA into a LIF. If you wish to make a withdrawal, we will need to generate this maximum manually. Please reach out to our support team so that we can provide you with a maximum amount for the year, and help you set up your withdrawal.
How to withdraw from a LIF
When you make a withdrawal from an LIF, you can choose whether to withdraw your annual minimum amount, your annual maximum amount, or some other amount.
- Visit my.wealthsimple.com and sign in to your Invest & Save account
- Select the Move Funds menu item
- Choose Withdraw funds
- In the From field, select your LIF
- In the To field, select your linked bank account
- Choose your Reason for withdrawal
- Under Amount, you can select Minimum, Maximum, or Other
- Select your Frequency
- Set withdrawal