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Converting a LIRA to a LIF in Ontario
April 16, 2022
12:57 pm
GR
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Which financial institutions, besides the big banks and insurance companies, offer LIFs - Life Income Funds in Ontario? If you have purchased a LIF, especially a LIF GIC, from which institution and how was your experience? Any issues? Any advice? Thanks.

April 16, 2022
1:27 pm
cgouimet
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I had a large LIRA with IG. Some time ago, I converted about 75% to my existing RSP.

The remainder of my LIRA went to LIF a few years ago. In a few years my RSP will need to go RIF Before year end of my 71st.

This was for flexibility. RIF and LIF are identical products except that LIF's are designed to last a certain number of years and therefore annual redemptions have minimums and maximums. However, RIF's do not have maximums. So, if you need/want a chunk more in a given year, you can do that from the RIF.

All done easily and smoothly within IG ...

CGO
April 16, 2022
1:51 pm
cgouimet
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If my memory serves me correctly, there is one rule in converting LIRA $ into RRSP $. Maximum 50% per calendar year.

So if the LIRA is now at $100k, $50k can go to RRSP this year. If the LIRA grows to $60k next year, you can then shift $30k of that to the RRSP. The year after that, 50% of the then LIRA value can go too, etc.

So technically, you will eventually have a LIF because the LIRA never actually gets completely depleted to the RRSP.

CGO
April 16, 2022
2:01 pm
Loonie
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I had one at Scotia and cashed it out as it wasn't that big.
I have noticed that the bricks and mortar CUs tend to offer LIFs but have no experience. e.g. DUCA.
Scotia charged me $50 just to cash it out - a few years ago.

April 16, 2022
2:05 pm
MG
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cgouimet said
If my memory serves me correctly, there is one rule in converting LIRA $ into RRSP $. Maximum 50% per calendar year.

So if the LIRA is now at $100k, $50k can go to RRSP this year. If the LIRA grows to $60k next year, you can then shift $30k of that to the RRSP. The year after that, 50% of the then LIRA value can go too, etc.

So technically, you will eventually have a LIF because the LIRA never actually gets completely depleted to the RRSP.  

This is actually incorrect. You can transfer 50% of your LIRA to a LRIF only once and the rule only applies to a federally regulated pension. There are different rules for provincial regulated pensions.

April 16, 2022
2:51 pm
cgouimet
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The bottom line is that GR needs to go face to face with a financial advisor to determine the best process for GR's needs.

CGO
April 16, 2022
3:45 pm
COIN
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"You can transfer 50% of your LIRA to a LRIF only once and the rule only applies to a federally regulated pension."

You also need a notary or lawyer to witness your signature. Fee is around $75 or free if you have a lawyer for a neighbor and you are on friendly terms with him/her.

April 16, 2022
4:37 pm
MG
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COIN said

You also need a notary or lawyer to witness your signature. Fee is around $75 or free if you have a lawyer for a neighbor and you are on friendly terms with him/her.  

Local notary in my town only charged me $20. YMMV.

April 16, 2022
6:14 pm
Norman1
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In some municipalities, like Toronto, the city councillors are deemed commissioners of oaths and one of them could do the federal unlocking attestations.

I've seen specialized notary services in some large cities, like https://www.notary-toronto.ca, that will do them for something like $10.

April 17, 2022
7:10 pm
COIN
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Norman1 said
In some municipalities, like Toronto, the city councillors are deemed commissioners of oaths and one of them could do the federal unlocking attestations.  

I had previously asked my city councillor to sign my passport application but he declined saying he didn't know me. I think they will sign only of they actually know you.

April 17, 2022
7:14 pm
Loonie
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Why would anyone sign a passport form for someone they don't know? The whole point is security.

April 17, 2022
7:34 pm
AltaRed
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Loonie said
Why would anyone sign a passport form for someone they don't know? The whole point is security.  

No kidding! I only signed as a P.Eng reference for people that I knew well AND felt they were of good character. It is a different (less onerous) situation if all one is doing is witnessing a signature.

April 17, 2022
8:02 pm
Norman1
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The Canadian passport application is different. Passport application requires a signed declaration from a guarantor and not an affidavit from the applicant.

The guarantor for a passport has to declare that he/she has known the applicant personally for at least two years and declare the actual number of years.

Details are in the passport application form PPTC 153.

April 25, 2022
4:18 pm
GR
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Returning to the original topic of this thread, which financial institutions in Ontario offer LIFs (especially LIF GICs), converting from LIRAs, apart from the major banks, insurance companies and investment dealers?

April 25, 2022
4:46 pm
Nehpets
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GR said
... which financial institutions in Ontario offer LIFs (especially LIF GICs), converting from LIRAs... 

I had one with DUCA for a while, while their rates were better. If you approach them, recommend asking to speak to a management person rather than the regular CSR's of Member Connect, because they are not familiar with the process.

Other CU's offer them as well, and their websites will indicate availability of LIF's.

Stephen

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