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Quebec LIF rule changes

If you have Life Income Funds (LIFs) from a Quebec-regulated pension plan, you might be affected by a number of rule changes coming into effect January 1, 2025.

Woman reviews online retirement accounts on laptop

What’s changing for Quebec account holders?

As of January 1, 2025, holders of Quebec-regulated LIF accounts can expect a few new rules.

  • LIF owners age 55 and older can withdraw any amount from their account above the mandatory minimum. The maximum limit no longer applies.  
  • LIF owners between 54 and 65 no longer have the option to apply for temporary income.
  • If you’re under 55, the LIF minimum and maximum amounts that you can withdraw still apply; however, the maximum factor has changed. You can still access temporary income with small adjustments (if your plan allows it).
  • If you’ve been a nonresident for two years, you can still unlock Locked-In Retirement Account (LIRA) funds, but this option no longer exists for a LIF.
  • LIF owners aged 65 and over are no longer permitted to withdraw under the small amount unlocking provision
  • You can no longer transfer any money from a LIF to a Registered Retirement Savings Plan, Registered Retirement Income Fund, or a not locked-in account of a Voluntary Retirement Savings Plan (VRSP).

How will this affect members nearing retirement?

Being able to withdraw any amount from your LIF in retirement can change your retirement financial planning. For example, some choose to postpone taking their Quebec Pension Plan and Old Age Security benefits for a few years instead of right at age 65 in order to receive the maximum amount. Your LIF is therefore a valuable tool to help manage your retirement income.

What should you do with your LIF now?

Right now, you don’t need to take any immediate action - just be aware of the changes while planning your retirement. Keep in mind that retirement budgeting should be ongoing, even when you stop working. Just because you can withdraw more money from your LIF, it doesn’t mean you should empty the account as quickly as possible. Your retirement life could last decades and be as unpredictable as your working years. Everyone’s situation is different. That’s why it’s important to carefully consider all your sources of retirement income and come up with a comprehensive plan that works best for your unique situation. Talk to your advisor about your finances regularly to better understand how you’ll support the retirement lifestyle you want.

The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.

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