How to free up some of that pension money
Do you have a locked-in RRSP left over from an old employer-sponsored pension plans?
Because the withdrawal rules are so stringent and the amount often small, money like this is sometimes put away and forgotten about. Now, however, it’s possible to get at that cash, under certain circumstances.
But it’s not always easy.
Each provincial pension plan has different rules and federal pensions are also distinct, so check with someone in your province to see what works. Recent rule changes still only affect about 10 per cent of Canadian pension plans that are federally regulated, although most provinces have already moved to increase flexibility in their locked-in savings plans.
If you're 55 years of age or older and your locked-in assets are less than half of the yearly maximum pensionable earnings (YMPE) — $23,150 in 2009 — for example, you can legitimately unlock up to 50 per cent of your locked-in assets, or convert them to another tax-sheltered registered account, with no withdrawal limits.
There are also new provisions available for smaller, locked-in account balances, if you have significant medical expenses or if your annual income is likely to be very low.As well, anyone, regardless of age, may withdraw cash, up to 50 per cent of YMPE, from any combination of locked-in accounts (all withdrawals need to be made within 30 days), if you expect to spend more than 20 per cent of your income in any given calendar year for medical treatment, if your life expectancy is reduced or if you plan to leave Canada permanently.
Posted by: Squeaky | Nov 28, 2021 11:24:21 PM
Is there any other way to beable to get this money out in Ontario.
Posted by: Retired | Nov 30, 2021 5:22:45 PM
Go to the FSCO website if you are in Ontario. There are many changes made recently. If you convert your locked-in plan to a New LIF, you can withdraw or transfer up to 50% of the amount in your current locked in plan to an RRSP or even cash but then there are withholding taxes to be aware of. Try the link below.
Posted by: Dan Hayne | Nov 30, 2021 7:38:42 PM
I have at locked in Federal plan. My Girl freind has been In the hospital for over a month and unemployed for almost a year (15 week of medical EI PAY). I am behiind in all my bills and facing forclosure on my house.
I have in this RRSP enought to get me out of this rut I am in, BUT I have been told that even trough hardship I earn too much.
I DON'T want to delclare bankrupsy(excuse the spelling)
Are there any tips or ideas that you can provide me( I live in Alberta)
At my wits end
Posted by: Goran | Nov 30, 2021 8:03:19 PM
Have you actually applied to the OSFI to release your federal pension under financial hardship or is the conclusion that you make too much money just someone's personal conclusion? You won't know you can't withdraw the funds until you try.
Also, how long have you been with your girlfriend? if you've been with her long enough to be considered common-law you certainly have a fighting chance to pull some of those funds under financial hardship with a special emphasis on medical bills.
Posted by: Dan | Nov 30, 2021 9:28:09 PM
I am new at this sort of thing. I have gone through The bank that holds the RRSP for me.I have jumped through the hoops and was told I MIGHT get a thousand dollars.
As for the OSFI I do not know that term.
My girl friend and I have been together for almost 4 years. I am almost ready to give in and let it ( after 30 years of working hard) all go... :(
I know that I am not the only one that is going through this. I have gone to My MP and they try to help but its like all sorts of doors keep slaming shut.
Its my money I have earned it and when I need it the most Nada???????
Its almost like no one can help. We (Canadian tax dollars) bale out big business but when it comes to the little hard working canadians that are down on their luck they so so what and sorry. I wish I was a lobbiest to help people like me.
I would like beable to pay everyone and get my life on track...
If anything thanks for letting me vent... :)
Posted by: ed | Dec 3, 2021 1:57:03 AM
Bankruptcy is obviously a last choice, but if it is going to be your only option then don't cash in any RRSP's and then declare bankruptcy. RRSP's are now creditor protected so get some advise from a trustee before you touch any of them locked in or not.
Posted by: alkarim shariff | Feb 1, 2022 10:56:55 PM
good morning sir
i have filed bankrupty as my hrs were reduced at my current employer, and we had pay cut and by the end of feb 2012 i will have discharged hopefully, and i have locked in pension with scotia from my old employer, i spoke to scotia bank they said to me hard ship, they onlyaround $ 8000 and my wife has her pay cut, both of us we only make 2000 bi weelky with 2 kids we have 5/7 yrs please can you guide me what step should i take to with draw and other one i have with wsib as i was injured on march 1997 at the job, looking at 8000/10000 please help me so i can buy my kids clother and shoes and buy my self eye glasses living off money mart is putting me behind can u please guide me thanks