More than a third of Canadians have withdrawn funds from their RRSP before retirement with home-buying the number one reason. A survey from BMO found that 25 per cent of those that had released funds from their retirement savings account has used it for home purchase with 21 per cent using funds to pay down debt. Living expenses and emergencies were the other major reasons.
With tax implications of early withdrawal of funds, experts generally do not recommend it, although home purchase can be an exception. Chris Buttigieg of BMO Wealth Management commented: "It's best to only make premature RRSP withdrawals for the purpose of buying a new home or paying for continuing education, as these withdrawals may qualify for the Home Buyers Plan or the Life Long Learning Plan, respectively." About a third of those who dipped into retirement savings paid the money back.
With tax implications of early withdrawal of funds, experts generally do not recommend it, although home purchase can be an exception. Chris Buttigieg of BMO Wealth Management commented: "It's best to only make premature RRSP withdrawals for the purpose of buying a new home or paying for continuing education, as these withdrawals may qualify for the Home Buyers Plan or the Life Long Learning Plan, respectively." About a third of those who dipped into retirement savings paid the money back.
