The RRSP Lifelong Learning Plan (LLP) in Canada

Going back to school can be one of the best investments you make in your future. Whether you're upgrading your skills, changing careers, or pursuing higher education, financing your studies can be challenging.

The Lifelong Learning Plan (LLP) allows eligible Canadians to withdraw money from their RRSP (Registered Retirement Savings Plan) to finance full-time education or training — without paying tax at the time of withdrawal.

Let’s look at how it works.

🔹 What Is the Lifelong Learning Plan (LLP)?

The LLP is a government program that lets you temporarily withdraw funds from your RRSP to pay for:

• Tuition
• Books
• Living expenses
• Training or skills development programs

The program is administered by the Canada Revenue Agency (CRA).

Unlike a regular RRSP withdrawal, the amount withdrawn under the LLP is not immediately taxable, as long as you repay it according to the rules.

💰 How Much Can You Withdraw?

Under the LLP, you can withdraw:

• Up to $10,000 per year
• Up to a maximum of $20,000 total

You can participate in the LLP more than once in your lifetime, provided you have fully repaid previous LLP withdrawals.

👤 Who Qualifies?

You may qualify if:

• You are enrolled in a qualifying educational program
• The program lasts at least three consecutive months
• You are enrolled as a full-time student
• You are a resident of Canada at the time of withdrawal

💡 Important: The LLP can also be used to finance education for your spouse or common-law partner.

📅 How Does Repayment Work?

The LLP is not free money — it is a temporary withdrawal from your retirement savings.

You must repay the withdrawn amount:

• Over 10 years
• Starting no later than five years after your first withdrawal, or
• The second year after you stop being a full-time student (whichever comes first)

Each year, you must repay at least 1/10th of the total amount withdrawn.

If you do not make the minimum repayment in a given year:

• The unpaid portion is added to your taxable income for that year.

🧮 Example

David withdraws $15,000 from his RRSP under the LLP to complete a two-year college diploma.

He must repay:

• $1,500 per year over 10 years.

If he repays only $1,000 in a given year:

• The remaining $500 will be included in his taxable income.

⚖ Advantages and Considerations

✅ Advantages

• No tax withheld at withdrawal
• Helps finance education without taking on high-interest debt
• Flexible repayment over 10 years
• Can be used for spouse’s education

⚠ Considerations

• You lose investment growth while funds are out of your RRSP
• Missed repayments become taxable income
• It may reduce long-term retirement savings

🔍 Is the LLP Right for You?

The LLP can be a powerful tool if:

• You’re investing in a career change
• You expect higher income after completing your studies
• You have a repayment plan in place

However, it should be part of a broader financial strategy that balances education goals with retirement planning.

📌 Final Thoughts

The RRSP Lifelong Learning Plan gives Canadians the flexibility to invest in their future without immediate tax consequences.

But like any financial decision, it requires planning. Understanding repayment obligations and long-term impact on retirement savings is essential.

If you’re considering using the LLP, professional guidance can help you:

• Evaluate tax implications
• Plan repayment strategically
• Coordinate with other education funding options