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 and the harmonized provinces — Ontario, Nova Scotia, Newfoundland and Labrador, and British Columbia — 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, so the maximum factor drifts up or down a little each year. Always check the current-year table — the figures above are the 2026 federal/harmonized values, drawn from the OSFI 2026 LIF table and cross-checked against FSRA Ontario’s published percentages.

Provincial variation

Not every jurisdiction uses the federal/harmonized formula:

• Harmonized (federal, ON, NS, NL, BC): the percentage table above applies directly.
• 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: sets its own maximum withdrawal percentages each year through Retraite Québec.

If your plan is not in the harmonized group, treat any harmonized-table figure 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 and your spouse are both 65 or older, LIF income qualifies for pension income splitting and the pension income tax credit, both of which can cut the tax further.

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