The lender reports that 30 per cent of respondents who withdrew funds from their retirement savings plan did so to purchase a home. Paying off living expenses (21 per cent) and paying off debt (18 per cent) were the next most common reasons.
While buying a home is likely to be a good investment, the use of retirements funds for short-term emergencies and living expenses raises a red flag.
"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.
Nationally, 38 per cent of respondents to the BMO survey have withdrawn funds from their RRSP. The most likely to do so are those in Atlantic Canada (48 per cent) where most are using funds for a large purchase other than a home; and in BC (44 per cent) where 38 per cent are using funds to buy a property.
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Using retirement savings to fund a home purchase remains the top reason for withdrawing cash from a RRSP, a BMO survey shows.