Borrowing from RRSP to pay down debt
When does the money borrowed from an RRSP have to be paid back. At what interest rate and how much can we safely take out we have 250000 in RRSP We are 50 yrs. old
When does the money borrowed from an RRSP have to be paid back. At what interest rate and how much can we safely take out we have 250000 in RRSP We are 50 yrs. old
Unfortunately, the only time you may “borrow” money from your RRSPs is to purchase a home (and very specific rules apply).
You have the right to make withdrawals from your RRSPs – when you do the withdrawal will be subject to income tax and at the end of the year you will be issued a T4RSP to include on your tax return. Be very careful if you make an RRSP withdrawal to ensure that you set aside enough of the money to pay the extra income tax you will be required to pay on your next tax return – the bank or financial institution that you deal with should be able to assist you with the tax calculation.
Before you make this decision, I suggest you book an appointment with a finacial planner (either at your bank or with your insurance company).