Overview
There are three types of withdrawals you can make from an RRSP:
Each of these withdrawals comes with its own process and rules, so please read on for how each withdrawal works and their tax implications. The same rules apply if you're withdrawing from a spousal RRSP. However, only the annuitant (the primary account owner) can make withdrawals.
Normal withdrawal
You'll need to pay withholding tax on the money you withdraw from your RRSP. You can think of withholding tax as a partial down payment toward the total amount of tax you’ll owe on the withdrawal. This is because the amount you withdraw is added to your taxable income for the year.
We'll automatically take any withholding tax out of your withdrawal and pay it to the government. The amount of withholding tax we send depends on which province you live in:
If you withdraw: | Withholding tax rate (excluding Quebec): | Withholding tax rate (Quebec residents): |
Up to $5,000 | 10% | 19% (5% Federal + 14% Provincial) |
Between $5,001 and $15,000 | 20% | 24% (10% Federal + 14% Provincial) |
More than $15,001 | 30% | 29% (15% Federal + 14% Provincial) |
For example, if you live in Ontario and withdraw $10,000 from your RRSP, the amount you'll receive after tax is $8,000. This amount is considered taxable income and will be added to your total income for the following tax year.
Your spouse may be taxed on the amount you withdraw if they contributed to your spousal RRSP in the year of the withdrawal request or the two preceding years. Please use Form T2205 to calculate the amount you and your spouse must report to the Canada Revenue Agency.
How to make a withdrawal
To make a normal withdrawal from an RRSP, follow these steps:
- Sign in to your Wealthsimple account
- Select an RRSP or Spousal RRSP to withdraw from
- Select Move money
- Choose a bank account to deposit the funds to
- Choose your Reason for withdrawal
- Enter an Amount
- Select your Frequency
- Select Set withdrawal
- Log in to your Wealthsimple mobile app
- Select an RRSP or Spousal RRSP
- Tap Move money
- Tap Withdraw
- Select the RRSP or Spousal RRSP to withdraw from
- Choose the reason for the withdrawal
- Follow the prompts to complete your withdrawal
Home Buyers’ Plan
The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $60,000 in a calendar year from your RRSP to buy or build a qualifying first home for yourself or for a related person with a disability.
How to make a withdrawal
You can make a Home Buyer's Plan withdrawal from your RRSP by following the same instructions as a standard withdrawal. Just make sure to select your reason for withdrawal as Buying a home with a Home Buyer's Plan. You can then follow the prompts on the screen to ensure you are eligible and complete the withdrawal. Home Buyer's Plan withdrawal timelines are the same as normal withdrawal timelines.
You must make a withdrawal no later than 30 days after the closing date of the purchase.
Lifelong Learning Plan
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.
Funds must be in your RRSP for at least three months before they can be used for an LLP withdrawal. The maximum amount you can withdraw in any calendar year is $10,000.
How to make a withdrawal
You'll need to fill out an RC96E form to withdraw funds from your RRSP under the LLP. We will ask you to fill out the form when you set up the withdrawal through your Wealthsimple profile. To get the RC96E form, make sure you choose Education using a Lifelong Learning Plan as your Reason for withdrawal.
We will liquidate your managed RRSP for you when you make the withdrawal request. Trades take 1 business day to settle, so the entire process takes about 4-6 business days. If your withdrawal request gets cancelled, the funds for the withdrawal will automatically be re-invested for you.
You must liquidate your self-directed investing RRSP before making the withdrawal request.
Convert your RRSP to a RRIF
If you're under the age of 71 and wish to convert your RRSP into an RRIF, you will need to contact our support team.
If you are over the age of 71 and would like to convert your RRSP into an RRIF, you can see below for more information. You will need to contact our support team in order to have your account converted.
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