When can you unlock a LIRA? (2024)

Getting money out of your LIRA

If you have alocked-in retirement account (LIRA), it’s because you’ve transferred money into it from a former employer’s pension plan or from a former spouse’s employer pension plan, for example, when marital assets were divided during a divorce. For that reason, typically the only way to unlock a LIRA is to retire, and the earliest age you can do that is 55.

LIRA withdrawal exceptions

Different jurisdictions have different rules for LIRA unlocking other than at retirement. Some reasons are common to more than 1 jurisdiction:

Small amounts:If the amount of money you have in your LIRA is considered too small be useful as a pension, you may be able to unlock it.
Shortened life expectancy:If a doctor provides an opinion that you have a terminal illness or disability that will significantly shorten your life, you may be able to unlock the money in your LIRA.
Non-residence in Canada:If the Canada Revenue Agency (CRA) confirms in writing that you’re a non-resident of Canada for tax purposes, you may be able to unlock your LIRA.
Financial hardship:In some jurisdictions, if you’re facing financial hardship, you may apply to unlock a portion or all the money in your LIRA.
50% unlocking:Depending on your jurisdiction, you may qualify to unlock up to 50% of your LIRA funds and transfer them to aregistered retirement savings account (RRSP).

Check the rules for your specific LIRA to confirm your options:

LIRAs don’t exist in Prince Edward Island.

Paying tax on LIRA withdrawals

You’ll pay income tax on any money you receive from an unlocked LIRA, or from withdrawals from a LIF or annuity into which you’ve transferred your LIRA funds.