How to get money out of Locked-In Retirement Accounts + MORE Mar 17th

This GIC rate is offered by DUCA Financial Services and was updated on 0000-00-00. Click on the link above to get more details or apply online.

Unless you qualify due to extraordinary circumstances, you may need to draw down your locked-in LIRA money slowly (Geoff George/Getty Images)
Q: I have a LIRA and have been told that each province has strict laws on when I would be able to withdraw funds. I am 63 years old and would like to asses some of the money from the LIRA to pay off some debt.—Pete
A: LIRAs or Locked-In Retirement Accounts are also known as locked-in RRSPs. They are locked in because the money in a LIRA comes from a defined contribution (DC) or defined benefit (DB) pension plan when you leave your employer. Pensions are meant to be paid out over time, so when pension money goes into an RRSP account, it is locked in to make sure it lasts.
You are correct, Pete, that there are restrictions on LIRA withdrawals. Typically withdrawals cannot begin before the age of 55 and you must change your LIRA into a LIF (locked-in Life Income Fund) or LRIF (Locked-in Restricted Life Income Fund) to begin withdrawals. Minimum and maximum withdrawal amounts can be taken each year thereafter according to either your age or your spouse’s age–depending which you choose to base the withdrawals upon when you establish the account…

This GIC rate is offered by Oaken Financial and was updated on 2014-12-19. Click on the link above to get more details or apply online.

This GIC rate is offered by DUCA Financial Services and was updated on 2014-11-28. Click on the link above to get more details or apply online.

Last week’s blog introduced a new white paper, The Role of Preferred Shares in Your Portfolio, coauthored with my colleague Raymond Kerzérho, director of research at PWL Capital. That article looked at the reasons investors might consider adding Canadian preferred shares to a diversified portfolio: namely high yields relative to corporate bonds, tax-favoured dividend income, and low correlation with other asset classes.
Those are three tempting reasons to use preferred shares. But as Raymond and I explain in our paper, the overall risk-reward trade-off in this asset class is not particularly compelling. In my opinion, most balanced portfolios would likely be better off without preferred shares. For those who want to add them to the mix, we make the following recommendations:
Only use preferreds in non-registered accounts. While preferred shares may be a diversifier in any portfolio, their largest benefit is their tax-advantaged dividend income. If you need current income from a non-registered account, preferreds can be a good alternative to corporate bonds, which are often very tax-inefficient…