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38% of Canadians dip into RRSPs early, BMO survey suggests

38% of Canadians dip into RRSPs early, BMO survey suggests

Percentage of respondents withdrawing savings rose from 34% last year, poll indicates

Almost four out of every 10 Canadians withdraw money from an RRSP before they hit 71, a new poll from BMO suggests.

Almost four out of every 10 Canadians withdraw money from an RRSP before they hit 71, a new poll from BMO suggests. (Shutterstock)

Almost four out of every 10 Canadians polled in a recent BMO survey admit they’ve withdrawn money from their RRSP early, and almost a fifth of them don’t ever expect to replenish what they’ve taken out.

According to the poll of 1,500 people, conducted by Pollara but commissioned by Bank of Montreal, more and more Canadians are dipping into their retirement savings to keep their heads above water financially.

In a similar poll last year, 34 per cent of respondents said they had tapped their registered retirement savings plans early. This year, it jumped to 38 per cent.

The survey was conducted online between Dec. 14 and 19. It carries a margin of error of plus or minus 2.5 percentage points, 19 times out of 20, BMO said.

Of those polled who had dipped into the kitty early, almost a third, 30 per cent, said they had a good reason for doing so: buying a house. Under the Home Buyer’s Plan, Ottawa allows an RRSP-holder to withdraw up to $25,000 from their RRSP if they’re going to use the money for a down payment.

But more than a fifth of those who have withdrawn money early said they did so to pay living expenses, and 18 per cent reported they did it to pay down debt — two excuses the tax man will not accept as legitimate enough to waive the penalty for doing so.

“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,” Chris Buttigieg with BMO Wealth Management said in a release announcing the results of the poll.

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