More using RRSPs for homebuying, everyday costs

More Canadians are withdrawing cash from their retirement funds for home purchase, but worryingly, many are doing so to cover everyday expenses.

A report from BMO shows that 40% of Canadians have taken cash from their RRSP with 27% doing so to buy a home, 21% for an emergency, and 20% to pay off debt.

However, 23% of those who have withdrawn from their savings plan have done so to meet everyday costs.

"We've seen a steady increase in the amount of money Canadians are withdrawing from their RRSPs to meet short-term needs; this should be considered only as a last resort," said Robert Armstrong, Vice President, Multi Asset Solutions, BMO Global Asset Management. "There are tax consequences associated with withdrawing from your RRSP, so be sure to consult a financial professional to ensure you have exhausted all other options that may be available to you."

The average withdrawal of $20,952 revealed in the annual survey is a $3,739 increase from last year.

Regional Breakdown


% of Canadians who
have made an RRSP

Average amount
Canadians have
withdrawn from
RRSPs ($)

Top reason for making an
RRSP withdrawal




To buy a home (27 per cent)




To buy a home (30 per cent)




To buy a home (35 per cent)




To buy a home and to help pay
for living expenses (26 per cent)




To help pay for living expenses
(36 per cent)




To help pay for living expenses
(29 per cent)




To pay off debt (23 per cent)


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