Maximizing your RRSP

Borrowing for an RRSP

Take advantage of unused portions of your RRSP and get a refund on your tax return.

RRSP Loan Calculator

RRSP products to consider:

CIBC RRSP Maximizer

Borrow anywhere from $5,000 to $50,000 to top up your RRSP contributions at a low interest rate and with payments spread out over 5 years.

CIBC Home Power Plan®

By using the equity in your home you can get a lower interest rate on a line of credit that can be used to top up your RRSPs. Also, enjoy interest only payment option on the amount you use.

Compare these products: CIBC RRSP Maximizer, CIBC Home Power® Line of Credit

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Expand article : Comparing RRSP Loans and RRSP Withdrawals

RRSP loans help you maximize your retirement savings. The more you can put away and the earlier you do it, the better. Just as it’s important to open an RRSP, it’s equally important to make sure you’re getting the most out of your RRSP. That’s where maximizing your contributions with RRSP loans and making smart RRSP withdrawals come into play.

RRSP loans

An RRSP loan is a great way to ensure that you’re maximizing your RRSP contributions. An RRSP loan gives you the funds you need to meet your full annual RRSP contribution amount of 18% (consult the CRA website for updates), or top up your unused contributions from previous years.

If you deposited $4,000 last year but could have deposited $15,000, an $11,000 personal loan would allow you to take full advantage of your annual contribution room. Furthermore, if you deposited a total of $4,000 for the last two years, a $26,000 loan would help make up the difference.

RRSP withdrawals

If you need to withdraw money from your RRSP, you can do so, but keep in mind you will be taxed on the amount you withdraw. There are only two exceptions to this rule: buying your first home, and borrowing from your RRSP to further your education.

You can take $25,000 out of your RRSP to buy a home under the Home Buyers’ Plan (HBP). Remember to consult the CRA website to be sure your home meets the necessary requirements.

You can also withdraw money from your RRSP to pay for your education under the Lifelong Learning Plan (LLP). Do note however, withdrawn RRSP proceeds under the LLP can only be applied to your own education costs, or that of your spouse or common-law partner. Funding your children's education using these funds is not permitted.

If you choose to withdraw money from your RRSP, you have to repay it within 15 years. Generally, you have to repay 1/15 of the total amount you withdrew for each year of your repayment period. Your repayment period starts the second year following the year you make your withdrawal. If you withdraw funds for reasons other than those listed above, you may face penalties in the form of additional taxes.

Prepare for the future and apply for a personal loan with CIBC

If you’re interested in topping up your RRSP account with a personal loan, CIBC can help. Apply for an unsecured loan online, or speak with a CIBC advisor at 1-866-525-8622.

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

1 CIBC Prime is the variable rate of interest per year declared from time to time to be the prime rate for Canadian dollar loans made by CIBC in Canada. The interest rate on your loan will change whenever CIBC Prime varies.

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