Thirty-four percent of Canadians have withdrawn money from their RRSPs before retirement, according to a poll by BMO Financial Group. The study examined the reasons behind Canadians’ decisions to make these withdrawals and their concerns about the consequences.
On average, Canadians have withdrawn $15,908 from their RRSPs. One-third have paid back the money, but 25% expect they will never pay it back.
Top reasons for making RRSP withdrawals include:
- buy a home (25%)
- pay off debt (21%)
- help pay living expenses (21%)
- cover costs after an emergency, such as a car accident or house flood (15%)
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The study also found that, of those Canadians who have made an RRSP withdrawal, the majority (84%) said they only did so as a last resort. Three quarters said they were very concerned about the potential consequences of this decision, including:
- loss of retirement income (79%)
- withholding tax on the cash at the time of withdrawal (77%)
- not being able to save effectively for retirement (77%)
- loss of contribution room in the future (62%)
Regional Breakdown
Region | % who have made an RRSP withdrawal |
Average amount withdrawn from RRSPs |
% who have paid back the money withdrawn |
Top reason for making an RRSP withdrawal |
National | 34 | $15,908 | 33 | To buy a home |
Atlantic | 40 | $8,509 | 34 | To help pay living expenses |
Quebec | 30 | $12,622 | 42 | To buy a home |
Ontario | 35 | $17,092 | 30 | To help pay living expenses |
Alberta | 32 | $16,538 | 35 | To buy a home |
B.C. | 33 | $24,100 | 28 | To buy a home |