BMO Financial Group today revealed that a significant number of Canadians (four in ten) who hold Registered Retirement Savings Plans (RRSPs) have withdrawn funds before reaching retirement. 'These survey results are worrying; they indicate that many Canadians are not treating RRSPs for their intended use,' said Caroline Dabu, Vice President, Retirement & Financial" />
"These survey results are worrying; they indicate that many Canadians are not treating RRSPs for their intended use," said Caroline Dabu, Vice President, Retirement & Financial Planning Strategy, BMO Financial Group.
"Generally, withdrawing money from your RRSP prior to retirement is something to be avoided if possible.
Your RRSP should be a critical component of your overall retirement plan and should only be accessed at retirement."
Early withdrawals from RRSPs can result in a heavy tax bill, the loss of contribution room and the loss of the potential growth of the investment.
does point out that there are some situations when withdrawing money from an RRSP makes sense-such as the purchase of a first home.
"With the right planning and savings tools, there are a variety of alternatives that individuals can explore without having to touch their RRSPs," said Ms. Dabu
suggests the following: