Locked-In Retirement Account - LIRA

You're a Canadian...just drinking LaBatt Blue and watching curling and thinking fondly "aboot" beating the U.S. in the War of 1812, eh. You leave a job that has a registered pension plan. The money you have built up in that pension plan gets transferred to a locked-in retirement account.

It's like your own personal, little satellite pension. The funds are "locked in" because you can't touch them until retirement.

A LIRA differs from another Canadian retirement account, the Registered Retirement Savings Plan, or RRSP. The RRSP works more like an IRA in the U.S. The Canadian worker contributes their own money, which grows over time, thanks in part to some government tax incentives.

The LIRA doesn't consist of worker contributions. The funds come from the registered pension plan.