An attractive LRIF strategy

Question: My husband is currently withdrawing the minimum amounts (based on my younger age) from both his self directed LRIF and RRIF accounts with Royal Bank Action Direct. We recently came across an article which stated that the annual maximum you’re entitled to withdraw from a LRIF account and the actual amount you withdraw can be transferred on a tax free basis to a non-locked RRSP or RRIF.

If this is correct, then he should be able to transfer to his non-locked RRIF the difference between the minimum amount he is required to withdraw from his LRIF before year end and the annual maximum allowed. Apparently all that is required is to file Form T2030 annually.

Is it really that simple? Could you not in effect, over time, transfer most of your locked-in LRIF funds into your RRIF account? Are there negative consequences? Is this something he should do and, if so, why? – C.A.K.


LRIFs (life retirement income funds) are governed by provincial legislation. Therefore, the rules vary somewhat from one jurisdiction to another. You will need to verify the rules regarding this matter in your home province.

However, as a general rule LRIFs follow the same bad parameters as RRIFs (registered retirement income funds), which are federally administered. In the case of a RRIF, excess withdrawals over the legal minimum can be transferred into an RRSP or another RRIF. Therefore, it is likely possible to do the same with excess withdrawals from a LRIF. But check the law where you live first. – G.P.