BMO Annual RRSP Study

Canadians Using RRSPs to Fund Everyday Expenses and Debt Repayment

TORONTO, ONTARIO--(Marketwired - Feb. 7, 2017) - BMO Financial Group released the second installment of its annual RRSP study today showing that though funding a home purchase remains a top reason to withdraw from their RRSPs (30 per cent), Canadians continue to dip into their retirement savings for living expenses (21 per cent) and debt repayment (18 per cent).

According to the study, Canadians have withdrawn an average of $17,213 from their RRSPs this year, an increase of $1,305 from last year ($15,908) and 38 per cent of Canadians have withdrawn money from their Registered Retirement Savings Plan (RRSP) before age 71, an increase of 4 per cent from last year (34 per cent).

"It's concerning to see that so many Canadians are dipping into their RRSPs to meet short-term needs, which should only be considered as a last resort" says Chris Buttigieg, Director, Wealth Planning Publications, BMO Wealth Management. "Before withdrawing from an RRSP, speak to a financial professional to make sure you have fully considered the ramifications of the early withdrawal tax consequences, and to consider any additional options that may be available to you."

Reasons for Withdrawal

Top reasons why Canadians are withdrawing from their RRSPs include:

• Purchasing a home (30 per cent)
• To help pay off living expenses (21 per cent)
• To pay off debt (18 per cent)
• For emergencies (18 per cent)

Regional Breakdown

Region	% of Canadians who have made an RRSP withdrawal	Average amount Canadians have withdrawn from RRSPs		Top reason for making an RRSP withdrawal
National	38	$17,213		To buy a home (30 per cent)
Atlantic	48	$25,485		To make a large purchase, other than a home (22 per cent)
Quebec	39	$17,231		To buy a home (23 per cent)
Ontario	35	$16,593		To buy a home (31 per cent)
Prairies	33	$10,546		To pay off debt (27 per cent)
Alberta	41	$12,524		To buy a home (38 per cent)
B.C.	44	$21,538		To buy a home (38 per cent)

Despite three quarters (75 per cent) being very concerned over the consequences of taking money from their RRSP and 73 per cent saying they are familiar with the tax penalties or rules for repayment (in the case of a homebuyers withdrawal) when withdrawing from their RRSP before age 71, one in five do not expect to ever pay it back (19 per cent).