When Is The Best Time To Withdraw RRSP

RRSP is a saving plan that allows Canadian citizens to save in preparation for retirement. Although Canadians know RRSPs, there is more to it than most are not yet aware of.

More to these investment accounts than just keeping your money and waiting for retirement to cash out. When a bank exchanges an RRSP to their clients, they sell a prepackaged property, often a wrap program or joint funds accumulation.

However, the bank does not put restrictions because a client can open an empty RRSP account or a premium brokerage and save whatever properties you wish. There is a possibility of one person holding numerous different RRSP accounts with other companies.

When is the best time to withdraw RRSP

You can withdraw your RRSP at any time during your seventy-one birthday. To do this, you first have to change your RRSP to RRIF, and you don’t have to wait until seventy-two to withdraw the cash from RRIF.

The government considers money removed from RRIF as chargeable income and can impact the GIS. This is contrary to when you withdraw funds from TFSA since it is not regarded as taxable income and does not reduce the GIS.

What is the average retirement age in Canada?

There is no such thing as an obligatory or requisite retirement age in Canada because human rights laws condemn it. Therefore, no matter how old an employee is, no employer can force a worker to retire.

When Is The Best Time To Withdraw RRSP

But according to statistics, the average retirement age in Canada or for an average Canadian over sixty-three half years. The age keeps changing depending on some factors, for instance, type of employer ( private or government) and individual health status.

For self-employed individuals, the average age is sixty-one, and for national employees, it is sixty-one years. Those in the private sector retire at sixty-five. Besides all these, sixty-five years is always associated with retirement.

This is because individuals are qualified for soliciting Old Age Security pension at this age, a Canadian government program open to any Canadian aged sixty-five years and above and have lived in the country for at least ten years. The amount you can receive depends on the number of years lived in Canada after turning eighteen.

When does it make sense to start withdrawing money from RRSP?

Generally, most individuals retire before seventy-one years. Therefore at seventy-one is when withdrawing from your RRSP. Early withdrawals make sense in the following ways.

  • Lowers longterm taxes
  • Spreads out RRIF/RRSP withdrawals over more years
  • Provides a source of income flow before starting collecting other forms of income like OAS, CCP, and pension.

Making early withdrawals does not mean that you have to spend; if you are not after the income flow, you can use this way as a way of moving savings into a non-registered account or TFAS. Saving outside RRSPs is easy to access and is more tax efficient.


RRSP, a saving plan that allows Canadians to save for retirement, makes sense to make your withdrawals early enough. It is not necessary to wait until you retire before you make your withdrawals. If you do not need the cash, you can save them in a tax-efficient account.

Also read: