Locked-in Retirement Account (LIRA)

    flowchart LR
	    A[LIRA] --> B[Locked Funds]
	    B --> C[Tax-Sheltered Growth]
	    C --> D[Retirement Age]
	    D --> E{Withdrawal Options}
	    E --> F[Transfer to Annuity]
	    E --> G[Transfer to RRIF]

## What is a primary purpose of a LIRA? - [x] To hold pension funds until retirement - [ ] To fund daily expenses - [ ] To purchase stocks - [ ] To gamble in the stock market > **Explanation:** A LIRA’s main purpose is to keep your pension funds locked until you reach retirement, not to fund your Friday night pizza parties! ## Can you withdraw from a LIRA before retirement? - [ ] Yes, anytime you want - [x] No, except in exceptional cases - [ ] Only if it’s a holiday - [ ] When you have a bad hair day > **Explanation:** Generally, you can’t withdraw from LIRAs until retirement, except for specific emergent scenarios—bad hair days aren’t one of them! ## Which of the following is true regarding LIRAs? - [x] They offer tax-sheltered growth - [ ] They require major fees for holding - [ ] They are not governed by any laws - [ ] They can be used for everyday expenses > **Explanation:** LIRAs offer tax-sheltered growth, allowing your retirement funds to grow without being taxed until withdrawal—practical! ## What does it mean that funds in a LIRA are "locked"? - [ ] You can only access them with a secret code - [ ] You can’t withdraw them until retirement - [x] They cannot be cashed out until a specified age - [ ] They can only be watched, not touched > **Explanation:** “Locked” means you won’t be able to access those funds without waiting until retirement—kind of like a birthday party piggy bank that you can't break open! ## What type of account does a LIRA often get compared to? - [x] Locked-in RRSP - [ ] Checking Account - [ ] Savings Account - [ ] Credit Card > **Explanation:** LIRAs are compared to Locked-in RRSPs, both having restrictions on withdrawals—like that one uninvited guest at your party who won’t leave! ## At retirement, what can you do with funds from a LIRA? - [ ] Use it to buy a private island - [ ] Use it to finance a start-up - [x] Transfer to an annuity or retirement fund - [ ] Convert it into cash for splurging > **Explanation:** At retirement, the right options are transferring it to an annuity or another retirement vehicle, not buying a private island (unless you win the lottery)! ## What happens to your LIRA if you change jobs? - [x] You can transfer it to another pension plan - [ ] You must spend it immediately - [ ] It disappears into thin air - [ ] It turns into a pumpkin at midnight > **Explanation:** If you change your job, you can transfer your LIRA to another pension plan—good news, no disappearing acts involved! ## What’s a funny term that some might mistakenly think LIRA stands for? - [ ] Laugh-Inducing Retirement Account - [x] Lamentably Inaccessible Retirement Account - [ ] Lovely Impressive Retirement Account - [ ] Legally Invulnerable Retirement Account > **Explanation:** To some, it might sound like “Lamentably Inaccessible Retirement Account” due to its withdrawal restrictions! ## What is a common misconception about LIRAs? - [x] They are not just like cash at a bank - [ ] They are good for shopping - [ ] They are an instant-rich scheme - [ ] They operate on a pay-as-you-go system > **Explanation:** LIRAs are not like cash at a bank but rather savings that are strategically held for retirement—saving for that Hawaiian vacation takes some discipline! ## Who is primarily targeted to use LIRAs? - [x] Individuals with pension plans from their previous employers - [ ] Anyone at any age without income - [ ] Those who dislike retirement savings - [ ] Freelancers with lots of money > **Explanation:** LIRAs are primarily designed for individuals who have pension funds from their previous employers, ensuring their retirement savings are secure!