There was a discussion here the other day about someone dipping into their RSP to pay the mortgage on the investment property they couldn’t sell.
It brought up comment anecdotes about others dipping into their retirement funds to pay the mortgage.
DON’T DO IT!
RSPs are protected in bankruptcy, but if you withdraw from them to pay for a losing asset and end up going bankrupt you lose not just the home, but your retirement savings as well.
And you want to retire don’t you?
You should exhaust all other options before touching your RSPs and that includes the option of bankruptcy. Losing your home isn’t nearly as bad as losing your home and all of your retirement savings.
Real estate is not always the direct path to riches, leverage is a beautiful thing on the way up, but it can really bite on the way down. Just ask anyone in who bought in the hot bubble markets of the US in 2005.
Don’t make the mistake of throwing away your retirement savings, especially if you don’t have a lot of time to start over with your savings.