If you do not repay your Home Buyers' Plan (HBP) withdrawal within the required 15-year period, the outstanding annual repayment amount becomes taxable income for that year. You will pay income tax at your marginal rate on the missed payment amount, and this amount is added to your income tax return on line 12900.
You must repay the amount withdrawn under your HBP to your RRSP over a maximum period of 15 years. Repayment must begin in the 2nd year following the year of withdrawal. So, if you withdrew money in 2024, you would begin repayment in the 2026 tax year.
The attribution rule.
If the spouse who owns the RRSP (the annuitant) withdraws funds within 3 years of the last contribution, the Canada Revenue Agency (CRA) will attribute that withdrawal back to the contributing spouse, meaning the contributor will pay the tax on the withdrawn amount.
HBP Cons:
RRSP withholding tax
For withdrawals up to $5,000: 10% (19% in Quebec) For withdrawals between $5,000 up to $15,000: 20% (24% in Quebec) For withdrawals over $15,000: 30% (29% in Quebec)
The Lifelong Learning Plan allows you to withdraw from your RRSP to help pay for full-time education or training for you or your spouse or common-law partner. The withdrawal is not taxable as long as the funds are paid back to your RRSP over a 10-year period, typically starting five years after your first withdrawal.
For a $70,000 income in Canada (using 2025 rates), you'll pay roughly $13,000 to $20,000 in total taxes (federal, provincial, CPP, EI), depending on your province, resulting in a take-home pay around $50,000-$59,000, with federal tax around 14.5% or 20.5% depending on the portion, plus provincial tax and deductions like CPP and EI.
The "240,000 rule" (or $1,000-a-month rule) is a retirement guideline suggesting you need $240,000 saved for every $1,000 of monthly income you want in retirement, based on a 5% annual withdrawal rate ($240,000 x 0.05 = $12,000/year or $1,000/month). It's a simple way to estimate savings needs, but it doesn't account for inflation, taxes, market volatility, or other income sources like Social Security, making it a starting point, not a complete plan.
To comfortably afford a 400k mortgage, you'll likely need an annual income between $100,000 to $125,000, depending on your specific financial situation and the terms of your mortgage.
Can you retire on $500,000 in Canada? Based on some of these rules, let's calculate what the retirement income would be. The average retirement age in Canada is 65. Estimating that the $500,000 is to last you 25 years, your yearly retirement income would be $20,000.
39% of Canadians aged 55-64 have less than $5,000 in savings (-5 pts); 73% have $100,000 or less in savings. More than one in three (36%) women aged 55-64 have no savings at all, compared to one in five (22%) men.
Other tax efficient ways to withdraw your RRSP funds
December 31 of the year you turn 71 years old is the last day that you can contribute to your RRSPs.
If you don't pay back your HBP, you have to include the unpaid amount as income on your tax return and you'll be taxed at your marginal tax rate. This is similar to what happens if you withdraw money from your RRSP, it's considered income and you're taxed accordingly. You also lose the RRSP contribution room forever.
Even though the CRA requires that you repay the amount you withdrew under the HBP within 15 years, it doesn't mean you cannot pay more than the minimum amount each year. For example, let's say you contributed $5,000 to your RRSP in 2025 and, according to your NOA, you're required to repay $1,500 under the HBP.
A £250,000 pension pot is a significant milestone, but whether it's enough to retire on will really depend on your individual circumstances. For many people, it would fund a minimum-to-modest lifestyle when combined with the State Pension, but it may fall short of moderate-to-comfortable living standards.
In California, a household can be considered middle class if it makes between $63,674 and $191,042. However, that range can change at the city level. SmartAsset used U.S. Census Bureau's 2023 American Community Survey 1-year data and analyzed the median household income in 100 of the largest U.S. cities and all states.
According to a new study published by the Fraser Institute, in 2024 the average Canadian family (including single people) paid $48,306 in total taxes. Given the average family's total cash income was $114,289 in 2024, this means families paid 42.3 per cent of their incomes in taxes levied by all levels of government.
Unemployment compensation generally is taxable. Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.