What is a TD Mutual Funds Life Income Fund (LIF)?
A LIF is designed to provide income using your Locked-In RSP or pension savings. Although you can convert your locked-in savings to a LIF whenever it is allowed by the rules governing your plan (age 55 in most provinces), it must occur prior to the end of the year in which you turn 71.
In Newfoundland, by the end of the year in which you reach the age of 80, you must use the remaining amount left in your LIF to purchase a life annuity. You may also convert it to a Locked-In Retirement Income Fund (LRIF).
What is a TD Mutual Funds Locked-In Retirement Income Fund (LRIF)?
An LRIF is similar to a LIF with one notable exception: there is no requirement to convert your LRIF to a life annuity at age 80. You can maintain your LRIF indefinitely throughout your retirement years.
Whether you choose a TD Mutual Funds LIF or LRIF, you'll enjoy control and flexibility:
- You decide how much income you receive (subject to annual minimum and maximum amounts)
- You decide which TD Mutual Funds to invest in and which funds to receive payments from
- You decide when to receive your payment, from as often as every week to as little as once a year
- You decide how to receive your payment, either through direct deposit into your bank account or a cheque by mail
- You decide who should become beneficiary of your assets in the event of your death
You'll continue to enjoy tax-deferred growth potential
As registered accounts, the funds within TD Mutual Funds LIFs and LRIFs maintain the benefits of tax deferral. Only the amount withdrawn from the account is subject to tax. Income tax will be deducted at source for any amount withdrawn over the annual minimum payment.
Maximum withdrawals help your income last
In addition to the annual minimum amount you must withdraw, there is also an annual maximum you are able to withdraw. This maximum is designed to ensure you will have income until age 80.
Find out where LIFs and LRIFs are available
It's important to note that the availability of LIFs and LRIFs varies across Canada.
Please be aware that LIFs are not available in Saskatchewan, Prince Edward Island, Yukon, Nunavut or Northwest Territories.
Additionally, please note that LRIFs are only available for locked-in plans governed by legislation of certain provinces. Currently, LRIFs are available in Newfoundland, Ontario and Manitoba. Please contact your local TD Canada Trust branch for more details.
How do I decide which locked-in option is best for me?
With so many options, it is not an easy decision to make. We can help you review the many factors involved and create a personalized solution that's just right for you.
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