This New Trend Could Threaten Your Financial Future

The results from a recent poll from BMO are quite surprising, and unfortunate. Of the 1500 Canadians surveyed, 40% of respondents said they dip into their retirement savings early. Is there a reason why is such a large portion of Canadians are making withdrawals from their RRSPs? Here is the following data.

27% said they were using the money to buy a home.

23% said they did it to help pay for living expenses.

21% said they withdrew the funds for emergencies.

20% said they withdrew from their RRSPs to pay off debt.

The average amount withdrawn from RRSPs by Canadians jumped by nearly 22% from 2016 to 2017.

Many respondents also said that they were not going to contribute to their RRSPs this year. The reasons that were given for this were:

44% said that they don't have enough money.

25% said that they are paying off debt.

21% said that they have other things to spend money on.

Withdrawing from your RRSP before retirement is a risky move for many reasons. Every time you dip into your retirement savings or fail to contribute to them, you put your financial future in jeopardy and delay your retirement. There are tax consequences that you face when you withdraw from your RRSP's early, so it's best not to touch them.

A better option, if you need money to pay down your debts or to put towards other goals, is to focus on a healthy budget. Another thing to consider is your credit score. A healthy credit score allows you to borrow for less interest and the fastest way to get there is with a secured savings loan. It's the most powerful way to boost your credit score. The fact that you end up with some cash in your hand after the whole deal is a bonus. If you want more information on a secured savings loan, click here.

Have you ever had to make withdrawals from your retirement fund? Let us know in the comments!

Refresh Financial's secured savings loan can boost your credit score and put savings into your bank account.