LIF Withdrawals Explained: Minimum, Maximum & Tax (2026)

A Life Income Fund (LIF) is the retirement-income vehicle for locked-in pension money. When you leave a job with a defined-contribution or other registered pension plan, those funds are typically transferred into a Locked-In Retirement Account (LIRA). To turn a LIRA into income, you convert it to a LIF — and unlike a regular RRIF, a LIF caps how much you can take out each year.

What makes a LIF different: the maximum

Every LIF withdrawal must fall inside a window with both a floor and a ceiling:

• Minimum: identical to the RRIF minimum for your age. It is set by the same CRA prescribed factor table — about 5.28% at age 71, rising to 20% at age 95 and older — applied to your January 1 balance.
• Maximum: unique to LIFs. Because the money came from a pension, the rules cap your annual withdrawal so the account is more likely to last through retirement. There is no maximum on an ordinary RRIF; the cap is the defining feature of a LIF.

Take less than the minimum and your institution will top you up; take more than the maximum and the withdrawal is not permitted. Your job is to choose a number inside the band.

How the maximum is set

For federally regulated (PBSA) plans the LIF maximum is a percentage factor by age, reset every January using a reference rate. For 2026 the federal reference rate is 3.49%, which produces a maximum of about 6.03% at age 65 and rising factors at older ages. Multiply the factor by your January 1 balance to get the most you may withdraw that year. The reference rate is based on long-term Government of Canada bond yields from the previous November (series V122487), so the federal factor drifts up or down a little each year. The figures above come from the OSFI 2026 LIF table.

Ontario and British Columbia do not use the federal table. Both calculate the maximum with a formula that uses the greater of the long-term bond rate and a 6.00% floor rate. Because bond yields have been below 6%, the floor applies, so their factors are higher than the federal ones. FSRA’s Ontario table shows about 7.26% at age 65, and BCFSA’s table shows 7.38% at age 65. In both provinces the maximum is the greater of that percentage of your January 1 balance and the previous year’s investment earnings.

Provincial variation

Not every jurisdiction uses the federal/harmonized formula:

• Federal (PBSA) plans: the federal reference-rate table above applies.
• Ontario and British Columbia: their own formulas with a 6.00% floor rate (see above), not the federal table.
• Alberta, Manitoba, Saskatchewan: use their own maximum formulas; Saskatchewan no longer offers new LIFs at all (locked-in funds convert to a prescribed RRIF).
• Quebec: since January 1, 2025 a Quebec LIF has no upper withdrawal limit once the holder reaches age 55 (Retraite Québec).

For any other province, treat a figure from another jurisdiction’s table as indicative only and confirm the exact maximum with your provincial pension regulator.

Unlocking options

Locked-in does not mean locked forever. Most jurisdictions allow a one-time unlocking of up to 50% of a LIF (typically when it is first created from a LIRA), moving that portion to an RRSP or RRIF where the annual maximum no longer applies. There are also small-balance, shortened-life-expectancy, financial-hardship, and non-residency unlocking provisions, each with its own rules. Unlocking can give you the flexibility of a RRIF for part of your savings while keeping the rest in the protected LIF.

The tax

For tax purposes a LIF behaves exactly like a RRIF: every dollar you withdraw is fully taxable income in the year you receive it and is reported on a T4RIF slip. The minimum amount is exempt from withholding tax at source; anything above the minimum (up to the LIF maximum) is subject to withholding (10/20/30% outside Quebec) that you reconcile when you file. If you are 65 or older at the end of the year, LIF payments qualify as eligible pension income for pension income splitting, and your spouse’s age does not matter. The pension income amount (line 31400) has its own conditions on the CRA page, so check them for your situation.

To see your own minimum, your maximum, and the tax on a chosen withdrawal by age and province, use the LIF withdrawal calculator.