Canadian account used to hold pension assets transferred out of a registered pension plan while keeping them locked in for retirement use.
A locked-in retirement account (LIRA) is a Canadian retirement account used to hold pension assets that have been transferred out of a registered pension plan while preserving rules that restrict early access.
The word “locked-in” is the key idea: the assets remain designated for retirement rather than becoming fully flexible savings.
A LIRA matters because it sits between pension accumulation and retirement income.
When workers leave an employer or move pension assets out of a plan, the LIRA can preserve retirement status without turning the money into ordinary spendable cash.
A LIRA is usually funded by a transfer from pension assets rather than by ordinary new annual contributions.
In practice, the account is used to:
preserve pension-origin assets for retirement
keep tax deferral in place
separate locked-in money from more flexible savings
prepare assets for later conversion into retirement-income vehicles
An RRSP is a broader Canadian retirement savings wrapper with contribution-driven accumulation. A LIRA is more specifically a holding structure for pension-derived money with withdrawal restrictions.
The account can still hold investments. The lock applies to access rules, not to whether the assets can be invested.
RRSP: A more flexible Canadian retirement wrapper often contrasted with a LIRA.
Registered Retirement Income Fund (RRIF)"): A retirement-income account used after the accumulation stage.
Locked-In Retirement Income Fund (LRIF)"): A later-stage income vehicle for locked-in retirement assets.
Pension Plan: The institutional retirement arrangement from which locked-in assets may originate.