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The only provinces where home purchases were not cited as the number one reason were the Atlantic provinces and the Prairies. In Atlantic Canada, 48 per cent of those surveyed withdrew money with 22 per cent saying it was for a large purchase other than a home with $25,485 the average amount.

Debt drove the decision to withdraw from an RRSP for 27 per cent of those surveyed in the Prairies. The average withdrawal was $10,546 in those provinces with a third of those surveyed saying they had made a withdrawal.

Buttigieg said Canadians need to consider additional options that may be available before making any withdrawals. “Make sure you have fully considered the ramifications of the early withdrawal tax consequences,” said Buttigieg. In most cases, RRSP withdrawals will count as income in the year the money is taken out and taxed at your highest marginal rate.

After housing, nationally the second most popular reason to take money out of the RRSP was to help pay off living expenses at 21 per cent. Next was to pay off debt and emergencies, both at 18 per cent.

The study also found 38 per cent of Canadians have withdrawn money from their RRSP before 71, an increase of 4 percentage points from last year.

Three quarters of respondents were very concerned over the consequences of taking money out with 73 per cent saying they are familiar with the tax penalties or rules for repayment (in the case of a homebuyers withdrawal). The survey found 19 per cent do not expect ever to pay back the money they’ve withdrawn.

gmarr@postmedia.com

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