Manitoba RRSP Unlocking Rules

I spoke to someone in Manitoba today who asked me to share a common problem. Imagine you or a loved one are receiving treatment for a serious illness and need some additional money. Meanwhile they have a LIRA with a major financial institution which they cannot unlock to help with personal and medical expenses. They cannot unlock the LIRA because the Manitoba provincial government’s legislature adds an imaginary 6% growth to the current value of the LIRA until the owner reaches age 65 and if the imaginary result is over that year’s threshold, no access to their funds is possible.

WELL…this person tells me the current plan value has gone down in the last 36 months with no withdrawal. It’s shrinking! This is a diminishing asset who’s owner is trying to survive serious illness.

There could be a strong argument that the Manitoba government needs to revise their unlock regulations to reflect the reality that people are experiencing and to address the fact that people sometimes need to use their resources to escape extreme financial hardship. We all know many financial problems often become more expensive over time. In other words, a solution today often costs less than a solution tomorrow.

Are the plan owners simply supposed to let the account shrink to zero while provincial regulations ignore the truth and prevent people from accessing their hard earned money, often at the most important decision making time of their life? I realize the government believes it needs to restrict people from using their funds prematurely and this is true in many cases but only for fiscal reasons and maybe an ounce of prevention would be better than what comes later in the long run.

If enough people care about this and post comments here and on our Facebook page I will use the momentum created to add pressure to people who can influence change SO LET ME KNOW. Thanks