How do I withdraw from my RRSP?

Making a withdrawal from an RRSP is a little different than withdrawing from other kinds of accounts. There are three types of withdrawals you can make from an RRSP: a normal withdrawal, the Home Buyers' Plan, or the Lifelong Learning Plan. Each of these withdrawals has to be done using a specific process, so please read on for how these withdrawals work and their tax implications.

Normal Withdrawal
If you make a normal withdrawal from an RRSP (so, those that don't fall under the Home Buyers' Plan or the Lifelong Learning Plan) before retirement, you will have to pay a withholding tax on the amount you withdraw. The holding tax gets taken out of your withdrawal immediately and paid to the government.

If you withdraw: Withholding tax rate (excluding Quebec): Withholding tax rate (Quebec only):
Up to $5,000 10% 5%
Between $5,000 and $15,000 20% 10%
More than $15,000 30% 15%

So if you withdraw $10,000 from your RRSP in Ontario, the amount you'll receive after tax is $8,000. It's also important to remember that the amount you take out is considered taxable income and will be added to your total income at tax time.

As you can see, the tax penalty is pretty steep when you withdraw from your RRSP before retirement. If you'd like to begin processing a withdrawal from your Wealthsimple account, please follow these instructions.

Home Buyers Plan (HBP)
The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your RRSP to buy or build a qualifying home for yourself or for a related person with a disability. Note that funds must be on deposit for at least three months to qualify for an HBP withdrawal.

To withdraw funds from your RRSP under the HBP, you'll need to fill out a T1036 form. You will be prompted with this when you set up the withdrawal through your Wealthsimple dashboard. Simply click on your name in the top-right corner and you will see an option for "Withdrawals". Be sure to select your Reason for withdrawal as 'Buying a home using a Home Buyers Plan' to download the form.

Once we receive this form, we can liquidate your RRSP for you! Trades take 3 business days to settle, so the entire process takes about 7 business days. We will stay on top of this for you but if you have any questions, please give us a call at 1(855) 510-8948.

Lifelong Learning Plan (LLP)
The Lifelong Learning Plan (LLP) is a program that allows you to borrow up to $20,000 from your RRSP to pay for full or part-time education and training. The maximum that can be withdrawn in any calendar year is $10,000. Please note that an LLP cannot be used to pay for a child's education and that funds must be on deposit for at least three months to qualify.

To withdraw funds from your RRSP under the LLP, you'll need to fill out an RC96E form. You will be prompted with this when you set up the withdrawal through your Wealthsimple dashboard. Simply click on your name in the top-right corner and you will see an option for "Withdrawals". Be sure to select your reason for withdrawal as 'Education using a Lifelong Learning Plan' to download the required form and upload it.

For the bottom section of the form, please use Canadian ShareOwner Investments as the RRSP Issuer. This is our brokerage. Their information is as follows:

RRSP Issuer: Canadian ShareOwner Investments Inc.
Address: 862 Richmond St W #201, Toronto, ON M6J 1C9
Phone: (416) 595-7200

Once we receive this form, we can liquidate your RRSP for you! Trades take 3 business days to settle, so the entire process takes about 7 business days. We will stay on top of this for you but if you have any questions, please give us a call at 1(855) 510-8948.

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