2 options when you retire
In Ontario, you have the following options for your defined contribution (DC) pension plan when you retire:
- Transfer to an individual locked-in income fund (LIF) – In Ontario and most provinces, these funds require you to withdraw income each year between certain minimum and maximum amounts. While you have some flexibility in how much you withdraw each year, these funds are structured to ensure that you have retirement income that lasts your lifetime.
- Buy an annuity from an insurance company – This is a contract that guarantees to pay you an income for life. Once you buy the annuity, you don’t have to make any investment decisions or manage your savings in any way. Learn more about annuities.
Another option: Put money in both
Consider using some of your money to buy an annuity and transfer the rest to a LIF. You can also use LIF savings to buy an annuity at any time in the future, if your need for guaranteed income increases as you get older.