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At TD, we are committed to keeping you informed of matters that affect your investments.
I am writing today to inform you about a temporary COVID-19 measure implemented by the Government of Québec to ease the rules for temporary income withdrawals from a Life Income Fund (referred to as 'LIF' hereafter) in 2020.
Temporary income refers to additional funds that can be withdrawn from a LIF in combination with your regular LIF withdrawals. The option allows you to enhance your retirement income from a LIF. As an example, some clients may choose to receive temporary income to provide financial relief if they are experiencing financial difficulties in 2020.
If you were under 54 years of age on December 31, 2019
There has been an easing of restrictions on the calculation, criteria and payment frequency for 2020:
- Your income will not be considered.
- You may have more than one LIF.
- You may withdraw temporary income as one lump sum or in several payments.
If you were between 54 and 64 years of age on December 31, 2019
No changes. You continue to be eligible to withdraw temporary income in accordance with the normal rules. Temporary income can be withdrawn as a lump sum or as monthly payments in 2020.
If you were between 65 and 69 years of age on December 31, 2019
You can now withdraw a temporary income as a lump sum in 2020 under the same rules as those applicable to individuals between 54 and 65 years of age. Under normal rules, individuals aged 65 or older are not eligible for a temporary income.
Some Important Considerations Before Deciding:
- You can only withdraw up to 40% of the Maximum Pensionable Earnings (MPE), which would allow you to withdraw up to $23,480 for 2020 as temporary income.
- Your maximum life income for the year will be reduced if you decide to take temporary income. The exact amount of the reduction varies with every individual and is based on multiple factors. Refer to the Retraite Québec website, www.rrq.gouv.qc.ca for more details.
- Withholding tax will apply to any amount withdrawn from the plan at the applicable federal, provincial or non-resident rate.
If you have any questions or would like to withdraw a temporary income from your LIF, please call EasyLine Telephone Banking at 1-888-568-0951 or book an appointment at your nearest TD branch.
If you do not wish to take advantage of this measure, there is nothing for you to do.