Life Income Funds

Posted in Finance, Accounting and Economics Terms, Total Reads: 1079

Definition: Life Income Funds

Life Income Funds is fund which will fund be used as a pension after retirement. The amount withdrawn will take into account the annuity factor and the amount accumulated over the years.

One cannot withdraw in lump sum but rather the income tax act provides an upper and lower limit of withdrawal by an individual. An individual can also switch to alternative plans such as the locked in retirement income fund. This is relevant to Canada.

The owner of the fund must specify the amount he intends to withdraw at the beginning of the years. The range is determined taking into account the lifetime value to be withdrawn.

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