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Lifelong Learning Plan

Secure Your Child’s Future: Invest in a Registered Education Savings Plan (RESP)

As Canadian parents, you have a remarkable opportunity to proactively save for your child’s post-secondary education expenses, which can easily amount to tens of thousands of dollars. By investing in a Registered Education Savings Plan (RESP), you not only gain a head start in covering these costs but also benefit from the accrued interest over time Lifelong Learning Plan.

An RESP acts as a dedicated savings vehicle specifically designed to assist in funding higher education. It offers various tax advantages and incentives, making it an attractive option for parents looking to financially support their children’s educational pursuits.

Start planning for your child’s educational future today by exploring the benefits and possibilities offered by an RESP. By investing wisely, you can pave the way for a brighter and more financially secure future for your loved ones.

Lifelong Learning Plan

Overcoming Financial Challenges: The Lifelong Learning Plan for Adult Education

For adults contemplating a career change or seeking to further their education, financing their schooling can pose significant challenges. With numerous expenses like rent or mortgage, car payments, existing debt, and the cost of raising children, taking on additional debt for continuing education may seem daunting or even unfeasible.

Fortunately, there is a solution: Canadians can tap into their Registered Retirement Savings Plan (RRSP) to cover their educational expenses.

Introducing the Lifelong Learning Plan (LLP). This program allows Canadians to finance their education or training using funds from their existing RRSP. Instead of incurring new debt with potentially high interest rates like student loans or credit cards, individuals can borrow from the money they have already saved in their RRSP. Moreover, these funds have been accruing interest over the years, providing an additional advantage.

By leveraging the Lifelong Learning Plan, adult learners can pursue their educational goals without the burden of excessive debt, making their educational aspirations more attainable and financially sustainable.


Understand How RRSP Withdrawals for Education Work

The Lifelong Learning Plan (LLP) allows individuals to make temporary withdrawals from their RRSP to finance full-time education or training for themselves, their spouse, or their common-law partner. Here’s how it works:

  1. Withdrawal Limits: You can withdraw up to $10,000 per year from your RRSP, up to a total of $20,000. However, this amount must be repaid within 10 years.
  2. Repayment Requirements: If you fail to repay the withdrawn amount on time, it will be considered as income and must be included in your tax return.
  3. Flexible Withdrawal: There is no limit to the number of times you can make withdrawals under the LLP. Once you repay the borrowed amount, you can make further withdrawals under the plan.


Understanding Taxes and Interest:
  1. Tax Advantage: The benefit of this program is that you don’t have to pay interest or income tax on the withdrawn amount. Since you are borrowing money from your own RRSP, the funds are tax-free when used for education expenses. However, you cannot claim a deduction for the amounts you repay.
  2. Using Pre-Taxed Money: Since RRSP contributions are made with pre-tax income, you are essentially using untaxed money for the withdrawal. This provides an additional advantage.
  3. Repayment and Contributions: Repayment of the loan starts five years after your first withdrawal, and you have ten years to pay it back. As you repay the borrowed amount, you can also contribute more to your RRSP, but you need to designate how much goes towards the loan and how much is for investing. The invested amount can be deducted from your income tax as a regular RRSP contribution.

By leveraging the LLP, you can access funds from your RRSP to support your education without the burden of interest or income tax, providing a financially beneficial option for pursuing further studies.

Lifelong Learning Plan

Qualifying for the Lifelong Learning Plan

To be eligible for the Lifelong Learning Plan (LLP), you must meet the following criteria:

  1. Canadian Residency: You need to be a Canadian resident for tax purposes.
  2. Full-Time Enrollment: You must be enrolled full-time in a qualifying educational program at a designated educational institution. Alternatively, you must have received an offer to enroll in such a program.
  3. Program Duration: The educational program should run for a minimum of three consecutive months.
  4. Course Commitment: You must dedicate at least 10 hours per week to your coursework.

It’s important to note that there are no restrictions on the number of times you can utilize the Lifelong Learning Plan throughout your lifetime. Once you repay your previous LLP withdrawal, you can make another withdrawal under the plan if needed.