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would you cash in rsp

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#1 EBMom


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Posted 11 September 2013 - 04:41 PM

to pay down debt

#2 Mama2Gracie


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Posted 11 September 2013 - 05:25 PM

Nope. You have to pay back everything you took out and you lose out on the interest.

#3 Trea


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Posted 12 September 2013 - 09:11 AM

I think it depends on my reason for wanting to pay down the debt. If it is to prevent yourself from losing your house or declaring bankruptcy, I'd do it. If it is just so you can not have those payments to worry debt payments to worry about, then no.

#4 Lasergirl


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Posted 12 September 2013 - 10:07 AM

No- you don't have to pay it back. But you do pay heavily in tax. For instance- if you were to take $10,000 out, you would be withholding tax up front of 20%, then that $10,000 will be added to your income at tax time. So you will have to pay extra then as well.

It would have to be a pretty desperate situation to pay that sort of penalty for me.

Mama2gracie- you only have to pay it back if you use the Homebuyers plan or the Lifelong Learning plan. For just a regular withdrawal- it is just that. For HBP and LLP- you can withdraw without having pay the withholding tax- and that is why you have to pay it back