We are familiar with using our Registered Retirement Savings Plan (RRSP) to finance the purchase of a home through the Home Buyers’ Plan (HBP). But did you know that you can also use your RRSP’s to finance post secondary school through the Life Long Learning Plan (LLP).
The LLP allows you to withdraw amounts from your RRSPs to finance full-time training or education for you or your spouse or common law partner.
To participate in the LLP you must:
- own an RRSP
- the student is enrolled on a full time basis and has received enrolment from institution
- Registered in a qualifying program or designated educational institution
- Be resident of Canada
- Special rules are available on part time basis for student who meet disability conditions.
You can withdraw up to a total of $20,000 from your RRSPs.
- Up to $10,000 in a calendar year
- Up to $20,000 in total.
You can participate in the LLP again, starting the year after you bring your LLP balance to zero
The amount you withdraw is not limited to the amount of your tuition or other education expenses. As long as you meet all of the LLP conditions when you make the withdrawal, you can use the funds you withdrew for any purpose.
When you withdraw funds from your RRSP under the LLP, you have to make repayments to your RRSPs. Each year you have to repay 1/10 of the total amount you withdrew until the full amount is repaid.
The LLP is a great way to update or develop skills that will open new doors for you. RRSP aren’t just for retirement. They can be used for other purposes prior to retirement