More & More Canadians Dipping into RRSPs Early

Posted 14 Mar 2017 by Natalie LeBlanc

The second “R” in RRSP may stand for “Retirement,” but that’s not stopping a whopping 38% of Canadians from making withdrawals before they retire.

Number and amount of RRSP withdrawals up over 2015

BMO commissioned a survey of Canadians in December 2016 that found an increase in the number of Canadians who dip into RRSPs early, from 34% in 2015 to 38% in 2016. What is disheartening is that almost half of those withdrawals were done to manage living expenses or debt. While your RRSP should be one of the last considerations to pay your bills, clearly many Canadians are finding it necessary to tap into their retirement nest egg just to make ends meet.

Atlantic Canada tops the list

Even more discouraging for us is that the highest amount of withdrawals took place in the Atlantic Provinces, with 45% making a withdrawal. The average amount of that withdrawal was also the highest in Canada, at $25,485.

We can only speculate as to the reason so many Atlantic Canadians feel the need to eat away at their retirement funds. Whether it’s due to debt, long term unemployment, a more recent job loss or demotion, or other cash flow problems, clearly day-to-day expenses are too high compared to regular income for almost half of those making RRSP withdrawals.

When RRSP withdrawals can be good

There are more positive reasons to make an RRSP withdrawal, however. Of those surveyed, 30% make their withdrawal under the Home Buyers Plan to buy a house. These withdrawals aren’t taxed (however you do have to pay yourself back) and help achieve two big financial goals: home ownership & maintaining your retirement nest egg.

Another RRSP withdrawal program not mentioned in the survey results is the Lifelong Learning Plan, which allows you (or your spouse) to borrow up to $20,000 from your RRSP to fund post-secondary education. Under the LLP, you pay yourself back under similar conditions as the Home Buyers Plan.


If you are nearing the need to make an RRSP withdrawal just to make ends meet, speak with one of our advisors about managing your cash flow or other options that may be available.



Evans, Pete. "38% of Canadians dip into RRSPs early, BMO survey suggests." CBC.

"BMO Annual RRSP Study: Canadians Using RRSPs to Fund Everyday Expenses and Debt Repayment."