New numbers out today show more and more Canadians are dipping into their retirement savings to cover short-term costs.
BMO has released the second installment of its eighth annual Registered Retirement Savings Plan study.
It found 40 percent of Canadians have made a withdrawal from their RRSP, with an average amount of $20,952 taken out.
That's up $3,739 compared with the average withdrawal of $17,213 last year.
Of those who made a withdrawal, 27 percent was to purchase a home, 21 percent went towards emergency costs, and 20 percent to pay off debt.
However, 23 percent of those who made an early withdrawal from their retirement savings plan was to cover day-to-day living expenses.
"It could come down to people right now -- particularly in the Ontario region -- are house-rich and cash-poor," says Robert Armstrong from BMO Global Asset Management.
"With housing prices continuing to go up, maintaining their lifestyle in the current house ... is starting to wear on them."
Armstrong says making premature withdrawals from retirement savings plans has harsh consequences.
"When you're withdrawing them when you're currently working, to pay for your living expenses, you're withdrawing them at the wrong point in time," he says.
"You're most likely going to have a higher tax rate associated with that withdrawal."
Armstrong says rather than making early withdrawals, people should consider reducing unnecessary expenses or looking at other ways to pay off debt.
"Canadians as a whole, nationally, have excessive debt levels compared to the rest of the world," he says.
"So, I think addressing levels either by reducing your expenses or looking to other sources to pay off that debt is a great alternative."