Here’s What You Need to Know About the Lifelong Learning Plan
At Connect Wealth, we believe learning doesn’t end at graduation—it evolves with you. Whether you’re exploring a career shift, helping your partner retrain, or developing new skills to stay ahead, education is a powerful investment. But how do you fund it without derailing your financial future? That’s where the Lifelong Learning Plan (LLP) comes in.
Think of the LLP as your personal bridge between where you are and where you want to go professionally. It’s a federal program that allows Canadians to withdraw up to $10,000 per year (to a maximum of $20,000 total) from their RRSP to pay for full-time education or training. This isn’t just a tool for recent grads—it’s designed for working adults, mid-career professionals, and even couples looking to build a more stable future together.
To qualify, you must:
- Be a Canadian resident.
- Be enrolled full-time in a qualifying educational program.
- Have enough funds in your RRSP to support the withdrawal.
Repayment Structure:
- You begin repaying the borrowed amount to your RRSP two years after the last year you were a student.
- Full repayment must be completed within 10 years, or it’s considered taxable income.
While the LLP provides flexibility, it’s not without trade-offs. Consider three scenarios illustrating potential benefits and drawbacks of using the LLP.
1. The Mid-Career Pivot
Let’s say you’re 40 and working in an unrewarding job, dreaming of something more meaningful—like nursing. The LLP can help you access $20,000 from your RRSP to pursue a full-time nursing program. You’re not stuck taking out high-interest student loans. You’re investing in a second career with strong job prospects—without compromising your monthly cash flow.
2. Supporting Your Spouse’s Dreams
Your partner wants to return to school to become an early childhood educator. You can use the LLP to help fund their education by withdrawing funds from your RRSP. It’s one of the rare financial tools that recognizes how households plan—and sacrifice—together.
3. Self-Employed Professional
You’re a self-employed professional in your mid-30s and you decided to withdraw $15,000 from your RRSP to pursue an MBA. The degree is valuable—but that withdrawal sets back your retirement savings. Due to a combination of unfortunate market timing, lower than expected wage growth, and external pressures on cashflow, you find yourself in a worse financial position after the payback period than if you had borrowed the money for school from elsewhere.
The Lifelong Learning Plan is a unique and underused resource. It gives Canadians the chance to retrain, pivot careers, or support a partner’s education—without relying solely on debt. But like any RRSP strategy, it should be approached thoughtfully. Withdrawing now means saving less for later, so it’s critical to ensure your retirement plan doesn’t get lost in the process.
Before tapping into your RRSP for education, talk to a financial advisor. We can help you understand the long-term impact, structure repayments, and ensure your learning journey strengthens—not weakens—your future.
Let’s plan the next chapter of your success.
Connect with us today to see how the LLP could fit into your financial roadmap.
