1. Your life expectancy has been shortened
- You may be able to unlock your locked-in assets if you become disabled or diagnosed with a critical illness that shortens your life expectancy. Your pension partner would have to accept a waiver form, and your doctor would have to write a letter stating that you are expected to live a significantly shorter life. The type of disability or illness, as well as your expected lifespan, are not required to be stated in the letter. The waiver and doctor’s letter must be submitted to the bank holding your locked-in retirement account.
2. Availability to unlock up to 50%
- If you are 50 or older, Alberta pension legislation allows individuals to unlock up to 50% of the funds in their LIRA before transferring the remainder to a LIF. A waiver form would have to be signed by your pension partner. The bank that maintains your LIRA unlocks the funds. This is a one time choice though and therefore you cannot choose to unlock more than 50% in the future, rather you have to wait until your LIRA matures.
3. Access to small amount
- The money in an LIRA or LIF is sometimes thought to be too small to provide long-term income. This small sum may be unlocked if you meet the age and maximum pensionable earnings thresholds for the year (YMPE). The Government of Canada establishes the YMPE each year. For 2022:
- If you are under the age of 65 and have less than $12,980 in any single locked-in account on the day you request a withdrawal, the account can be unlocked (less than 20 percent of the YMPE).
- If you are 65 or older and have less than $25,960 in any single locked-in account on the day you request a withdrawal, the account can be unlocked (less than 40% of the YMPE).
4. Becoming a non-resident of Canada
5. If you are in one of the five financial hardship situations listed below, you may be able to access funds in your LIRA or LIF. You apply to the bank that holds your account for the money to be released. You may apply for each of these reasons once per calendar year per account.
- Low income – In 2022, if your annual income is under $43,267, you may be able to receive up to $32,450.
- Foreclosure – If you or your pension partner received a letter threatening foreclosure on a debt secured by your primary residence. The amount unlocked can only be for the amount owed plus legal fees.
- Rent arrears eviction – If you are at risk of being evicted from your primary residence because you owe rent. The amount of unpaid rent is the most you can unlock.
- First month’s rent and security deposit – If you require the first month’s rent and security deposit on a new home.
- Medical costs and renovations – If you, your pension partner, or dependants have had or will have medical expenses not covered by a medical plan in the last and/or next 12 months, and/or you have made or will be making alterations to your main home due to your, your pension partner’s, or dependant’s illness or