Registered savings plans a mystery to many millennials

Only half of millennials are aware that money held in registered savings plans can be used for the purchase of a first home, says a new TD survey. And, only 28% of this group know RSP money can help pay for full-time education or training for mature students who take qualified education programs.

As such, most millennials won’t know that any money withdrawn to buy homes must be repaid over the next 15 years, or that money withdrawn as part of the Lifelong Learning Plan (clients can take out up to $20,000 over a four-year period) must be repaid within 10 years.

Read: Taxes for first-time homebuyers

So, start a conversation with young clients about how to use RSPs, and about the pros and cons of withdrawing money from these plans. The survey notes that of millennials who aren’t saving for retirement, more than 40% say they can’t afford to contribute, and more than a quarter (28%) say they’re focused on saving for other priorities.

Also read:

Why millennials aren’t saving more for retirement

Canadians struggle to afford kids, property

Younger millennials have appetite for risk