Withdraw from your RRSP

In this article:

Overview

When you withdraw money from a Registered Retirement Savings Plan (RRSP), it is considered taxable income. Because of this, we must withhold a portion of your withdrawal as a "down payment" on the taxes you may owe for that year and send it to the government on your behalf.

There are three main types of withdrawals you can make from an individual or spousal RRSP:

  1. Normal withdrawal: A standard withdrawal for any reason.
  2. Home Buyers' Plan: A tax-free withdrawal to buy or build a qualifying first home.
  3. Lifelong Learning Plan:  A tax-free withdrawal to pay for education or training.

Each withdrawal type has specific rules and tax implications. The same rules apply to a spousal RRSP, but only the primary account owner (the annuitant) can make the request.

Tip: If you're looking for information on how to convert your RRSP to an RRIF, review the information at the bottom of this page. 

Normal withdrawal

You must pay withholding tax on money withdrawn from your RRSP. This amount is added to your taxable income for the year. We automatically deduct the tax from your withdrawal and send it to the government.

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, you will receive $8,000 after the 20% tax is withheld.

Spousal RRSP three-year attribution rule
Your spouse may be taxed on a withdrawal if they contributed to your spousal RRSP in the year of the request or the two preceding years. Please use Form T2205 to calculate what you and your spouse must report to the Canada Revenue Agency (CRA). This rule doesn't apply to Home Buyers' Plan or Lifelong Learning Plan withdrawals.

Transfer shares out of an RRSP

When you transfer shares (holdings) out of an RRSP to a non-registered account, withholding tax is applied to the gross value of the shares. This means you must account for the tax before the transfer to ensure the final value in your destination account matches your goal.

Gross vs. Net amount

  • Gross amount: The total value of shares before tax is taken. This amount determines your withholding tax rate.
  • Net amount: The actual value of shares you receive in your destination account after tax is withheld.

Example: Receiving $10,000 in a destination account
If you want to receive $10,000 worth of shares in a destination account and are subject to a 20% tax rate:

  1. Calculate gross amount needed: $10,000 ÷ (1 - 20%) = $12,500.
  2. Calculate tax: $12,500 × 20% = $2,500.
  3. Outcome: You must identify $12,500 as the gross amount. You will receive $10,000 worth of shares, and $2,500 will be withheld.
Note: You must have the required tax amount ($2,500 in this example) as settled cash in your RRSP to cover the withholding tax.

How to make a withdrawal

Follow these steps to make a normal withdrawal from an RRSP:

Mobile app Web
  1. Log in to your Wealthsimple app
  2. Select an RRSP or Spousal RRSP
  3. Tap the Move tab at the bottom of the screen
  4. Tap Transfer money
  5. Select the RRSP or Spousal RRSP to withdraw from
  6. Select the destination account
  7. Tap Next
  8. Choose the reason for the withdrawal
  9. Follow the prompts to complete your withdrawal
Note: Depending on your reason for withdrawing, we might redirect you to use our website to initiate the withdrawal. 
  1. Log in to your Wealthsimple profile
  2. Select an RRSP or Spousal RRSP to withdraw from
  3. Select Transfer money
  4. Choose a bank account to deposit the funds to
  5. Choose your Reason for withdrawal
  6. Enter an Amount
  7. Select Next
  8. Select Submit to complete your withdrawal

Home Buyers’ Plan

The Home Buyers' Plan (HBP) allows you to withdraw up to $60,000 in a calendar year from your RRSP to buy or build a qualifying first home.
  • 90-day rule: Funds must be in your RRSP for at least 90 days before they can be used for an HBP withdrawal.
  • Deadline: You must make the withdrawal no later than 30 days after the closing date of the purchase.
  • CAD only: Wealthsimple can't process HBP withdrawals in USD. You must convert USD to CAD first.

To make an HBP withdrawal, follow the standard withdrawal steps but select Buying a home with a Home Buyer's Plan as your reason.

Note: You can also make a Home Buyer’s Plan withdrawal from a self-directed RRSP to your chequing account.

Lifelong Learning Plan

The Lifelong Learning Plan (LLP) lets you borrow up to $20,000 from your RRSP ($10,000 maximum per year) for full or part-time education.

  • 90-day rule: Funds must be in your RRSP for at least 90 days before withdrawal.
  • Required form: You must fill out an RC96E form. We will prompt you to complete this when you set up the withdrawal and choose Education using a Lifelong Learning Plan as your reason.

Withdrawal timeline

  • Managed accounts: Withdrawals typically take 4–6 business days.
  • Self-directed accounts: Withdrawals typically take 1–3 business days. 
Note: You must liquidate your holdings in a self-directed RRSP before submitting a withdrawal request.

Convert your RRSP to an RRIF

If you're under the age of 71 and wish to convert your RRSP into an RRIF, please follow these instructions. If you're over the age of 71, you must convert your account by the end of the year and should contact our support team to initiate the process.

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