Following Quebec, now Nova Scotia is changing its life income fund (LIF) rules. The new rules come into force on April 1, 2025.
Key changes
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LIFs opened |
LIFs opened |
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One-time withdrawal of 50% of the LIF for those age 55 and over Note that such a withdrawal could have significant tax consequences.* |
Clients aged 55 and over who open an LIF may, within 60 days of opening, request a one-time withdrawal of 50% of the amounts transferred. They can also transfer these amounts to an RRSP or RRIF. |
Clients aged 55 and over may transfer their contract to a new LIF starting on April 1, 2025 to qualify for the 50% withdrawal (within 60 days of opening1). |
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Eliminating temporary income provisions for LIFs established after |
No temporary income will be available for LIF contracts opened on or after April 1, 2025. |
Clients aged 55 and over who receive temporary income have two options:
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Unlocking of small amounts at age 55 (previously 65) |
Except for the change in age, the current procedure for unlocking small amounts remains unchanged. |
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1. Clients will have to request this as it is not automatic.
*Tax consequences
Any withdrawal from a LIF could have a significant impact on your clients’ next tax returns. This is an excellent opportunity to contact your clients to explore the options available and choose the strategy best suited to their financial and tax situation.
Action required for a one-time withdrawal of 50% in cash
If your clients aged 55 and over wish to withdraw 50% of the funds accumulated in their LIF contract opened on or after April 1, 2025, send us the withdrawal form available on the Nova Scotia government website within 60 days of contract opening to iaqtransactions@ia.ca, along with withdrawal instructions from surrender form F51-153A-2 or by email.
Action required to transfer the one-time 50% withdrawal to an RRSP or RRIF
If your clients aged 55 and over wish to transfer 50% of the funds accumulated in their LIF contract opened on or after April 1, 2025 to an RRSP or RRIF, send us the withdrawal form available on the Nova Scotia government website within 60 days of contract opening to iaqtransactions@ia.ca, along with withdrawal instructions from transfer form F51-153A-6.
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Learn more about the Life Income Fund (LIF) As a reminder, LIFs are used to convert savings accumulated in a locked-in retirement account (LIRA), locked-in RRSP or pension plan (RPP, SPP, PRPP, VRSP) into retirement income. They allow clients to make periodic withdrawals to meet their financial needs in retirement. The documents and webpages related to the LIF available in your Advisor Centre or on ia.ca will be progressively updated to reflect the changes made. |
