Advertiser Disclosure

The content on this website includes links to our partners and we may receive compensation when you sign up, at no cost to you. This may impact which products or services we write about and where and how they appear on the site. It does not affect the objectivity of our evaluations or reviews. Read our disclosure.

What You Need To Know About The Lifelong Learning Plan

Much has been said about saving for your child’s education using the Registered Education Savings Plan (RESP) and associated government grants (CESG, CLB, Provincial education grants).

So, how about if you need to go back to school? What are the options you have for funding your dreams of further education? And how does the Lifelong Learning Plan work?

Some reasons why you may decide to go back to school as an adult include:

  • To increase your income-earning ability
  • Your current or future job requirements
  • Your personal interest, dreams, and goals
  • For fun

Some options for funding your back-to-school project are:

  • Taking on a student loan
  • Withdrawing money from your RRSP via the Lifelong Learning Plan (LLP)
  • Applying for scholarships, grants, and other financial aids
  • Schooling and working part-time
  • Dipping into savings such as a TFSA
  • Employer tuition reimbursement programs
lifelong learning plan LLP

How Does The Lifelong Learning Plan (LLP) Work?

The Lifelong Learning Plan is a government program that allows you to withdraw money from your RRSP to pay for full-time education or training.

You can withdraw up to a maximum of $10,000 per calendar year and a total of $20,000 through the program. The funds can be used by you, your spouse, or your common-law partner.

Who is Eligible for the Lifelong Learning Plan

To be eligible, you must:

  • Own an RRSP account and be a resident of Canada
  • Be a full-time student (or part-time if you have a disability)
  • Enroll in a qualifying educational program at a designated educational institution

Other things to note:

  • You have up to 10 years to pay back the LLP to your RRSP.
  • A minimum of 10% of the amount withdrawn must be paid back each year.
  • There are no limits to the number of times you can use the LLP over your lifetime. After paying back the full amount owed, you can take out another LLP.
  • No tax is levied on withdrawals if withdrawals and repayment rules are adhered to.
  • If you pay back less than the required amount per year, the balance is added to your income for the year.
  • Unlike the RESP, LLP cannot be used to fund your kid’s or grandkid’s education.
  • You can make an LLP withdrawal and a Home Buyers’ Plan withdrawal simultaneously.
  • You cannot claim a deduction tax for repayments made under the LLP.

Final Thoughts

The LLP is one of many options for adults who plan to return to school to pay for their tuition, living expenses, books, etc.

If you are raiding your retirement pot to further your studies, ensure you have done your homework properly.

In the grand scheme of things, ensure that your further education plan is worthwhile, necessary, and likely to lead to success!

For more information on accessing the LLP, contact your financial institutions or call the CRA at 1-800-959-8281.

Related Posts:

Editorial Disclaimer: The investing information provided here is for informational purposes only and is not intended as individual investment advice or recommendation to invest in any specific security or investment product. Investors should always conduct their own independent research before making investment decisions or executing investment strategies. Savvy New Canadians does not offer advisory or brokerage services. Note that past investment performance does not guarantee future returns.

Top Investment Offers This month

Grow your portfolio and get $50 in FREE trades or invest $10,000 FREE

Best discount stock trading platform in Canada.

Invest yourself or get access to professionally managed portfolios.

Zero trading commissions for ETF purchases (save $10 per transaction).

Low fees for buying stocks starting at $4.95 per transaction.

Overall best crypto exchange in Canada with a $50 bonus

Get a $50 instant bonus when your initial deposit is at least $250.

Top Canadian crypto exchange with advanced trading tools & multiple fiats.

Buy and sell the most popular cryptocurrencies and earn interest on assets.

Pay some of the lowest trading fees in Canada.

Trade stocks/ETFs on Canada's top brokerage for customer service + $150 bonus

Earn up to a $150 sign-up bonus when you open an account and fund it.

Buy and sell 100+ commission-free ETFs; pay competitive fees for others.

Transfer fees are waived up to $150 when you transfer in assets of $15k or more.

Best broker for customer service + versatile investment app.

Retirement 101 eBook - 3D

Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in Forbes, The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.