Monday was one of the busiest days of the year for Canadian banks as it was the deadline for RRSP contributions. But recent surveys show fewer and fewer Canadians are making those contributions.
A recent BMO poll showed only 40 per cent of Canadians have put money aside in their RRSPs while a CIBC study put that number at 50 per cent. In both polls, the vast majority of respondents who weren’t contributing said they simply didn’t have the money to do so.
Financial adviser Nacim Hamane said many people who have come to see him say they realize the importance of saving for retirement but don’t have cash on hand. He said some are taking out loans in order to contribute.
The polls did show Canadians are opting for other investment options and that confusion remains over the roll the tax-free saving accounts introduced in 2009.
“For the majority of people, what we recommend is put some money aside for retirement,” said Hamane. “You’re getting your tax break. That tax break, instead of consuming it, put in your TFSA. So you’re doing double. You’re depriving the government of some taxes, for sure, but you’re paying yourself.”
He added that people should look at RRSPs like bills they have to pay off in order to be properly prepared for retirement.
