When can you withdraw your money from an RRSP?

You can withdraw from your RRSP before retirement, but it can result in negative tax implications, and your contribution room will not be restored. Within the Common Wealth plan, there is a transaction fee to complete a withdrawal.

When you withdraw funds from an RRSP, your financial institution withholds the tax. The rates depend on your residency and the amount you withdraw.

  • 10% (5% in Quebec) on amounts up to $5,000
  • 20% (10% in Quebec) on amounts over $5,000 up to including $15,000
  • 30% (15% in Quebec) on amounts over $15,000

If you’re looking to take advantage of the Home Buyers’ Plan, you can withdraw up to $35,000 from your RRSP in an interest- and tax-free manner to purchase or build your first home.

Eventually, all RRSPs must be converted to a Registered Retirement Income Fund (RRIF), so that you can set up a steady stream of income during your retirement.

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