Can I take money out of my RRSP without a penalty?

Can I take money out of my RRSP without a penalty?

Tap your RRSP if you’re buying a home or going back to school.

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house_money_322Yes, if you’re using it to buy your first home or head back to school. Under the federal Home Buyers Plan, you can withdraw up to $25,000 from RRSPs without paying tax. The catch is you have to repay the full amount within 15 years. You can also withdraw $20,000 from your RRSPs tax-free to finance your education, though no more than $10,000 in one year. Once again, the money has to be repaid.

Outside of those programs, if you try to withdraw money from your RRSP you’ll usually be hit with a steep withholding tax—as much as 30% of the money you withdraw. That penalty will eventually be refunded if your income is low enough though.

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