What's the difference between a LIRA and an LRSP?

The main difference between a locked-in retirement account (LIRA) and a locked-in retirement savings plan (LRSP) lies in the jurisdiction under which each falls: provincial or federal.

The LIRA and LRSP serve similar purposes and essentially work the same way:

  • Both are used to hold retirement funds from employer-sponsored pension plans.
  • Both are designed to be locked-in versions of RRSPs.
  • The funds they contain are locked-in, which means they generally cannot be withdrawn before retirement, with a few specific exceptions.
  • Both must eventually be converted to a life income fund (LIF) or life annuity to provide retirement income.

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