Maximum amount transferable with an application for a temporary income (age 54 to 64)
The holder of a life income fund LIF) can transfer an amount from an LIF to a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF), provided the transfer does not exceed the maximum allowed.
For LIF holders at least 54 years of age but under 65 years who apply for a temporary income, the maximum amount transferable is equal to the lesser of the following two amounts:
- the life income ceiling
- the difference between maximum income and the mandatory minimum withdrawal.
where maximum income is equal to the temporary income plus the adjusted life income.
The maximum amount transferable can therefore be expressed as follows:
Maximum amount transferable
= minimum [life income ceiling,
(maximum income – mandatory minimum withdrawal)]
where maximum income = temporary income + adjusted life income.
Note that...
- For the purposes of the calculation, the holder's age is determined as at 31 December of the year preceding the application for the transfer of an amount from an LIF to an RRSP or RRIF.
- The LIF QuickCalc online service enables you to calculate a life income and a temporary income.
- The Canada Revenue Agency sets the minimum yearly amount to be withdrawn from an LIF, which corresponds to the minimum amount to be withdrawn from an RRIF
. The minimum is $0 the year in which the LIF is opened.
Two helpful examples...
Example 1: The maximum amount transferable corresponds to the life income ceiling.
| Peter's age on 31 December
2023: | 60 years |
|
LIF balance: | $300 000 |
| Life income ceiling: | $20 100 |
| Mandatory minimum withdrawal: | $10 000 |
| Temporary income: | $27 400 |
| Adjusted life income: | $10 252 |
| Maximum income ($27 400 + $10 252): | $36 892 |
Maximum amount transferable from an
LIF to an
RRSP or RRIF
= minimum [life income ceiling, (maximum income – mandatory minimum withdrawal)]
= minimum [$20 100, ($36 892 - $10 000)]
= minimum [$20 100, $26 892]
= $20 100
In
2024, the maximum income that Peter can draw from his
LIF is $36 892. Of that amount, he must withdraw a minimum of $10 000. He can transfer a maximum of $20 100 to an
RRSP or RRIF.
Example 2: The maximum amount transferable corresponds to the difference between maximum income and the mandatory minimum withdrawal.
| Lucy's age on 31 December
2023: | 60 years |
|
LIF balance: | $540 000 |
| Life income ceiling: | $36 180 |
| Mandatory minimum withdrawal: | $18 000 |
| Temporary income: | $27 400 |
| Adjusted life income: | $26 332 |
| Maximum income ($27 400 + $26 332): | $52 972 |
Maximum amount transferable from an
LIF to an
RRSP or RRIF
= minimum [life income ceiling, (maximum income – mandatory minimum withdrawal)]
= minimum [$36 180, ($52 972 - $18 000)]
= minimum [$36 180, $34 972]
= $34 972
In
2024, the maximum income that Lucy can draw from her
LIF is $52 972. Of that amount, she must withdraw a minimum of $18 000. She can transfer a maximum of $34 972 to an
RRSP or RRIF.