The Quebec government recently announced new measures for life income funds (LIFs), effective January 1, 2025. The purpose of these changes is to offer Quebecers greater flexibility in their financial planning for retirement. Note that this reform applies only to Quebec LIFs.
Watchword: flexibility
Here are the main changes that will come into effect on January 1, 2025 for Quebec LIFs:
- Complete removal of the LIF withdrawal limit for persons age 55 and over.
The fact that there will no longer be any limit on these withdrawals will give you greater flexibility when it comes to withdrawing funds during retirement, which is an attractive advantage in terms of your financial and tax plan.If you feel it would be more financially advantageous to accelerate your LIF withdrawals, you’ll need to consider other aspects, such as:
- the impact of such withdrawals on your estate plan (the LIF gives priority of payment to the spouse, in the event of death)
- the greater creditor protection provided by the LIF
- the potential partition of your family patrimony (if applicable) in the event of death, divorce, legal separation or marriage annulment.
- Inability to transfer LIF funds directly to an RRSP, RRIF or non-locked-in VRSP account.
- New rules for calculating life income and temporary income from LIFs for persons under age 55.
To consult the table summarizing all the changes to Quebec LIFs, visit the Retraite Québec website: Amendments related to life income funds as of 2025.
If you have any questions or concerns about how these new measures could affect your financial plan, please contact your wealth management advisor to discuss them further.
Anik Bougie, LL.M. Fisc., F. Pl., TEP
Practice Leader, Financial Planning and Taxation
The information contained herein has been obtained from sources deemed reliable, but we do not guarantee the accuracy of this information, and it may be incomplete. The opinions expressed are based upon our analysis and interpretation of this information and are not to be construed as a recommendation. The tax strategies mentioned in this article may not apply in all cases. For any questions, don’t hesitate to contact your Wealth Management Advisor or your tax specialist, accountant or legal advisor.
