Why the Lifelong Learning Plan is for you
You want to improve your professional life, so you're thinking of completing your college or university degree. How do you manage it when the money isn't exactly growing on trees?
The Lifelong Learning Plan (LLP) is designed for just this type of situation. It allows you to withdraw money from your RRSP penalty-free. It's like giving yourself a no-interest loan.
You can use the LLP yourself or for your spouse. You can even both use it at the same time.
To be eligible for the LLP, you must meet the following conditions:
- Study for at least 3 consecutive months.
- Be considered a full-time student, according to the rules of your educational institution.
- Do at least 10 hours per week of courses or work.
- Be enrolled at a designated post-secondary institution. To learn more about designated educational institutions, visit the Canada Revenue Agency site.
How much can I withdraw? Up to $10,000 per year, with a limit of $20,000 in 4 years.
How long do I have to repay it? A maximum of 10 years. At least 10% of the amount must be repaid every year. Note that the repaid sums are not considered to be RRSP contributions and are not tax-deductible.
How many times can I participate in the LLP? As many times as you like. You can participate in the LLP again the year after you have paid the full amount back into your RRSP.
To learn more
Visit the Canada Revenue Agency site.
Tips and hints
RRSP at a glance
To better understand the basics of the registered retirement savings plan.
RRSP: Don't wait!
The sooner you start contributing, the better!
Read tip - The advantages of making early RRSP contributions
Unused RRSP contribution room
If you haven't contributed your maximum, you can catch up because your unused contribution room is carried over to subsequent years.
An RRSP loan can help you increase your contribution
Borrowing $10,000 for your RRSP could pay off in a big way.
Pay down your mortgage or contribute to your RRSP?
Your strategy should depend on your lifestyle and your age.
Read tip - Should you pay down your mortgage or contribute to your RRSP?
HBP: Using your RRSP to buy a home
How to withdraw part or all of your RRSPs without paying income taxes.
Read tip - Withdrawing from your RRSP without penalty to buy a property
Your savings: RRSP or TFSA?
It all depends on what you want to do with your money.