Can I take money out of my RRSP before I retire?

Canada Revenue Agency (CRA) allows for potential withdrawals from your RRSP, however, your actual plan may or may not permit it. Money withdrawn from your RRSP is subject to income tax in the year of withdrawal except under the following plans:

The Home Buyer’s Plan (HBP) is a federal program that allows you to borrow up to $20,000 from your RRSP ($40,000 per couple if both have RRSPs) to buy or build a qualifying home without paying taxes on the withdrawn amount.

You must repay the borrowed money into your RRSP within 15 years through annual contributions. If you don’t, the annual minimum repayment amount must be included with your other taxable income (e.g. your salary) in that tax year. For example, if you withdraw $15,000 from your RRSP to purchase your first home, you must pay back at least $1,000 each year for 15 years.

For more information on using RRSPs to purchase your first home, contact your local tax office.

The RRSP Lifelong Learning Plan (LLP) is a federal program that allows you to withdraw up to $20,000 from your RRSP (this withdrawal is subject to a $10,000 annual limit) over a 4 year period to finance full-time training or education for you or your spouse or common-law partner without paying taxes on the withdrawn amount.

You are eligible if:

• you are a Canadian resident;
• you or your spouse has enrolled, as a full-time student in a qualifying educational program at an eligible educational institution;
• the educational program is for a minimum 3 month duration which requires the student to spend 10 hours or more per week on courses or work in the program; and
• the enrolment takes place before March of the year following the year of the RRSP withdrawal.