Does it ever make sense to make an early RRSP withdrawal?

Other than the HBP and LLP, specific scenarios could make sense to make an early RRSP withdrawal. One situation could be where taking some of the tax hit now would be more beneficial than postponing it. For example, if you are nearing retirement and have a large RRSP that will get converted to an RRIF at 71, you may want to lower your RRSP balance. This way, you could have less “income” when your RRIF starts forcing withdrawals. This situation calls for some tax planning to see if tax savings from the lower RRIF payments outweigh the taxes owed when reducing your RRSP balance.

Can I withdraw from my RRSP without paying tax?

On the other side of things, where you might have very little income, there is a case where you could pay no tax at all on your withdrawal. Suppose your total income, including the money you withdraw, is less than the Basic Personal Amount for both the federal level and the province in which you reside. In that case, you’ll pay no tax on your RRSP withdrawal.