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You don't need to get so upset about the RRSP. Withdrawing funds from there is no sin and because you are earning essentially nothing you won't have to pay barely any tax on it. Sure you will lose the contribution room for the future but there is always the TFSA to make up for that and future RRSP room that you will earn.

You really aren't taking much of a penalty here. Sure you will have money withheld from you because of how it works but you will get all that back on your tax return ... well at least most of it. You can use your unclaimed contributions to get the rest back if you want to.

Going forward you should just use the TFSA for the sole reason that you don't lose any contribution room if you have to withdraw. Save your RRSP for when you income is really high (you can dream) so that instead of not claiming contributions (that was a smart idea even though you haven't been able to capitalize on it yet) ... you can claim them immediately.

I don't think your financial adviser gave you bad advice. The TFSA surely wasn't around when they gave you the advice and an RRSP is a fine emergency fund when you lose your job because your income goes to 0 allowing you to withdraw money tax free or at a very low tax. The only problem here is that your investments have lost money ... but that is a problem with investing in equities ... not RRSPs in general.

Good luck to you ... I hope you are able to pull out of this down situation soon!
 
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