In Canada, this is the name of the process of withdrawing funds from an RRSP before retirement. RRSP funds are "registered" with the government to receive a tax benefit, so to withdraw the funds means giving up the tax deduction. Because this would be very complicated to calculate, the government instead charges a flat percentage of the withdrawal in withholding tax, with the percentage varying depending on the size of the withdrawal. Also, the net amount you get is added to your taxable income for the year, and you never get the RRSP contribution room back. To top it all off, most firms who hold self-directed RRSPs will also charge a fee of $50 or so to process a deregistration. Ouch. Needless to say, deregistrations are not recommended unless you really, REALLY need the cash.

There are two exceptions where you can withdraw funds (other than at retirement, of course) without having to deregister them: if you are buying your first home (or just buying a home if you qualify as permanently disabled), or if you are withdrawing funds to attend school. In these cases you have to pay back the withdrawal amounts before you make further contributions, and if you delay too long, you do eventually get charged as if you had deregistered.

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