Is your RRSP locked in?

A common error I see with individuals is understanding locked in RRSPs.

Individuals with money in locked in RRSPs usually find themselves waiting too long to use the money and finding out that they cannot take out what they expected to receive during retirement from the plan.

This includes LIRA, LIF or LRIF plans. If you have money in a locked-in RRSP, there are a few strategies you can use to get money out earlier and get the most money out possible over your lifetime.

Before you transfer your locked in RRSP to a LIF, LIRA or LRIF, check which one will payout the most over your lifetime. Each provincial pension plan has different rules and federal pensions are also distinct.

As early as possible, plan to take the maximum annually from the plan. This is age 55 if the funds were from a BC pension plan.

If the funds were from another province, you may take it out earlier, Alberta is age 50 for example. Once you transfer to a LIF or LRIF plan to take out the maximum available each year. Provincial pension legislation calculates a maximum amount that can be withdrawn. If the maximum is not withdrawn, it continues to be locked in. All withdrawals are included in income for the year and are subject to tax.

However if you are still working, you can withdraw the maximum from your locked in RRSP and contribute those funds into a regular RRSP, therefore not affecting any tax and unlocking funds each year. This works for anyone under age 70.

Once the money is in an RRSP, you can withdrawal any amount at anytime. This is gradually unlocking your money over time and you can do this each year.

This brings me to mistake number two. If you have a small locked in plan, you can transfer it to a regular RRSP and take it out anytime.

The definition of small plan changes and varies by province but it is targeted for plans approximately $16,400 and under. Keeping up with each provincial change is challenging but ask your sponsoring plan administrator or financial professional.

Plan to unlock as much as possible as soon as possible, and knowing how can enhance your retirement income flexibility.


  1. Wendy

    So If I’m turning 55 this year (Oct) living in BC have a locked-in RRSP. I should change it now to a LIF, LIRA or LRIF?

    Would like to have access to these funds as soon as possible. Planning for retirement in the next couple of years.

    Find the banks don’t necessarily known enough about these pension plans.

  2. Kathie

    I would also like the same information as Wendy…am in the same boat.

  3. Susan

    I am in Manitoba and I will turn 62 this month. I retired a few years ago but have not touched my RRSP.
    I have it a 3 year term that is up on July 18, 2020 however, I wish to remove at least $15,000 from it now. My funds are held at a credit union and they are telling me that I cannot remove the funds until next year. Is the withdrawing of the $15,000 possible? I do know the tax repercussions.

  4. m. boone

    I would really like to know where to go or who to talk to specifically in the Vancouver area to make this happen as my TD bank says it cannot be done – as below – a reply directly to me would be appreciated.
    “However if you are still working, you can withdraw the maximum from your locked in rrsp and contribute those funds into a regular rrsp, therefore not affecting any tax and unlocking funds each year. This works for anyone under age 70.”

  5. Sydney Liverpool

    I am in Toronto and have a small locked in RRSP. Can I transfer the amount to a none locked in and then with draw. I am 69 years old the credit union is saying that it be able to get any money I would have to apply for low income expected or hardship. Is this true or can I just transfer it to a nonlocked rrsp. Thank you for your help

  6. Jeff

    Question… do I tell if my rrsp are locked in or regularr rrsp. I am planning on buying a house next year, and plan to use the money I have been contributing in to my rrsp for a down payment. But how do I tell the type of rrsp I have.

  7. Brenda

    I have a small locked in RRSP – and am turning 65 in Jan 2020.
    as I have other retirement plans – i was hoping to use this small locked in RRSP to eliminate any debts I have at retirement. Is this possible

  8. Nelia

    Down on my luck and need money to survive..tried withdrawing from my rrsp and lira..I’m 51 ..toronto ont..what can I do…stressed out

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