Author Topic: RRSP vs lock-in RRSP - can they be combined after age 55?  (Read 1358 times)

bluebelle

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RRSP vs lock-in RRSP - can they be combined after age 55?
« on: January 20, 2018, 05:43:47 PM »
First off - I get it, nice first world problem to have, but.....

Currently I have a personal RRSP, a group RRSP through work (to get employer match), a federally regulated locked in RRSP (from two past employers that were federally regulated), and another locked in in RRSP from third past employer that wasn't federally regulated.

As I understand it, I can't mingle 'regular' RRSP money with locked in RRSP money, and I can't even combine the federally regulared locked in RRSP with the non federally regulated locked in RRSP.

Does anyone know if these accounts can be 'merged' after age 55 (next year) when locked in funds become unlocked?  They're all with the same institution except for the group, and I'd prefer to have just one account (with the appropriate mix of funds), rather than juggling them all and trying to keep the correct asset mix across them.  When I resign/retire in two years, I know the group RRSP can merge into the non-federally regulated locked in RRSP.

FIRE_at_45

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Re: RRSP vs lock-in RRSP - can they be combined after age 55?
« Reply #1 on: January 21, 2018, 12:13:33 PM »
I canít answer you question but will chime into say I have the same first world problem.  I used to try to keep all accounts with the same AA and then I realized it doesnít matter.  Iíd work on figuring out a withdrawal strategy first and then allow some accounts to be more aggressive.  For example I am going to hold all my bonds in my personal RSP because I will draw that down first.
« Last Edit: January 21, 2018, 08:41:46 PM by FIRE_at_45 »

bluebelle

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Re: RRSP vs lock-in RRSP - can they be combined after age 55?
« Reply #2 on: January 21, 2018, 03:31:11 PM »
thanks, I guess it just annoys me that our nanny state of a government is going to make my accounting more difficult because too many people don't have self control and would have robbed their locked up RRSPs to go on vacation.  And then pilling on and making the rules different for federally regulated locked in RRSPs different than provincially regulated ones (and I only have one province to deal with, heaven help folks that have worked in multiple provinces).

I guess this qualifies as a MPP!  :-) I have enough retirement savings accounts that I'm complaining about having to manage them.

« Last Edit: February 05, 2018, 10:40:43 AM by bluebelle »

FIRE_at_45

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Re: RRSP vs lock-in RRSP - can they be combined after age 55?
« Reply #3 on: January 21, 2018, 08:42:51 PM »
I guess this qualifies as a MPP!  :-) I have enough retirement savings accounts that I'm complaining about having to management them.

Yes, this is a good problem to have for sure!  It's also great to be trying to minimize your taxes and maximize your spending because you created yourself one big nest egg.  ;)

Goldielocks

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Re: RRSP vs lock-in RRSP - can they be combined after age 55?
« Reply #4 on: February 15, 2018, 09:02:31 PM »
No, they can't mix....

The LIRA is used to buy a LIF or a LRIF.  (Life income fund, the purpose is to provide $'s for life) This is to guarantee that there is still money left when you are 80 and has maximums you can withdraw, as well as minimums.  These two  differ in that the LIF amount must be converted to an annuity at age 80, and an LRIF does not and can be passed on to heirs if you die after age 80.

The RRSP goes into the RRIF, which has minimums you need to withdraw starting at age 72  (needs to be converted the year you turn 71 but can be converted earlier.)

What you CAN do is buy a registered annuity using either RRSP and LRIF funds.. instead of a LIF.   I can't see why there would be restrictions in the source of the funds used to buy annuities, but even if there technically are, the payouts would come monthly and look like a single source in practical life.
 
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The exception to this "No Mixing" is that there is the ability to  unlock all or a portion of your LIRA and convert it to an RRSP / other fund. 

I was able to unlock a portion when I terminated (only the value of the portion I contributed, I think, the company portion was locked), and if the total fund is very small you can unlock it all... if you are terminated after 55 (check the age / rules, but I think this is where you see the age 55 in your thinking - it is related to unlocking rules) you can unlock additional amounts within a short time after termination.  ** I am fuzzy on the details -- need to look them up!!***

But the portions that stay locked, can't be merged because of the different rules about how to access them after age 71.

ETA -- Unlocking provisions vary by province (which is why I was fuzzy on them)

 Financial hardship is one reason (about to lose home, foreclosure, medical bills in ON, AB, NS)
50% unlocking after age 55 (can do this one time)
You are no longer a Canadian resident (allowed by 7 provinces).
Small balance (e.g., under $11k for several provinces, varies, ON & MB is $21k)
Smallish balance and age 65 or older ($21k for QC, BC, AB, NS)
Shortened life expectancy -- terrible reason...   you are expected to die so you can access your money.
Very Low income (ON, AB, NS),  e.g., income under $37k and you can unlock up to $27k per year (sliding scale).
« Last Edit: February 15, 2018, 09:41:55 PM by Goldielocks »

Lews Therin

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Re: RRSP vs lock-in RRSP - can they be combined after age 55?
« Reply #5 on: February 15, 2018, 09:11:58 PM »
Goldie is correct. There is a book on this: The pension puzzle by Brian Cohen.

Goldie hit the main points, but there are different types of LIRA (multiple provincial differences, federal) each have small differences. It's worth looking up the book at the library, or calling HR/pension person to figure out exactly where you fit. Some exceptions exist like removing the totality of the LIRA if it is small enough, or in case of a health/emergency.