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Before the LLP, think RRSP
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Hit the books without breaking the bank with the LLP
The LLP is the Lifelong Learning Plan.1 It allows you to withdraw up to $10,000 from your RRSPs per calendar year (tax-free!) so you or your spouse can go back to school full time. You can withdraw a maximum of $20,000 over 4 calendar years.
1. How does the LLP work?
It's simple. As soon as you are enrolled in your educational program or receive an acceptance letter (congrats!), call your advisor.2 Together, you'll determine how much you want to withdraw and fill out some paperwork. That’s it! You’ll then have the funds you need to bury yourself in books and not debt.
2. Are there any conditions?
Each year you withdraw, you need to meet a few conditions:
- You must have an RRSP.
- You must deposit the money into your RRSP at least 90 days before withdrawing it.
For instance, if you wish to withdraw $10,000 under an LLP on April 1, 2022, your RRSP should have a balance of at least $10,000 since January 2, 2022. - Be registered full-time in a qualifying educational program offered at a designated educational institution.
3. What is meant by calendar years?
LLP withdrawal limits are based on calendar years rather than a 12-month period.
- Calendar year: runs from January 1 to December 31
- 12-month period: a period of time corresponding to 365 days.
This distinction is important, as you can withdraw $10,000 per calendar year and $20,000 over four calendar years. For example, this means that you could withdraw $10,000 in September 2022, and again in January 2023, if you continue to qualify under the LLP
4. How does the refund work?
- Your repayment begins no later than the fifth calendar year after your first withdrawal—or earlier, if you finish school before.
- You'll have 10 years to pay it all back, by putting 10% of your LLP back into your RRSP each year.
- No fancy math needed! The Canada Revenue Agency (CRA) will tell you how much to repay in your federal Notice of Assessment.
- Each year, you will be able to contribute the maximum to your RRSP, in addition to repaying your LLP. However, this repayment won't reduce your taxable income!
Before you can benefit from the LLP, you need to contribute to your RRSP. So, what's the best strategy to keep your savings working for you until you go back to school? That's the million dollar question for our advisors.2
RRSP 101 in one minute
The Registered Retirement Savings Plan (RRSP) is a savings plan that allows you to invest a percentage of your income each year, mainly to finance your retirement, or to buy your first home or return to school.
The money invested is locked in until you withdraw it for any of the three goals above... and it offers several advantages:
- The money invested grows entirely tax-free until it's withdrawn.
- By contributing to your RRSP, you also reduce the amount of income tax you pay each year.1
An RRSP with Beneva, that’s a smart investment
The capital in your investment accounts is safe! In the event of your death, your beneficiaries recover the money invested before age 75, even if markets have gone down.
Our advisors get to know you and take great care in proposing diversified investments adapted to your profile.2
Investing with an insurer means you can designate a beneficiary to receive the balance in your account in the event of death.
You can rest easy with deposit coverage up to $100,000 per account category.3
Get a tailor-made projection of your retirement income thanks to our tool designed specifically for your retirement plan (RREGOP or PPMP). And for steady RRSP contributions made easy, go automatic with payroll deductions4 and watch your savings grow.
