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Our response:

There are two ways to borrow money from your RRSP tax-free: the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP).

The HBP allows you to borrow up to $25,000 if you are building or buying a qualifying home subject to certain conditions. The LLP allows you to borrow $20,000 to pay for full-time or part-time education or training expenses subject to certain conditions. The HBP and LLP require repayments to your RRSP within certain timeframes.

If neither the HBP nor LLP apply to your situation, you can still withdraw money from your RRSP, but you will pay an immediate tax (withholding tax) on the money you take out, and possibly more at tax time. And you’ll permanently lose the contribution room you originally used to make the contribution. Learn more on our Making RRSP withdrawals before you retire article.