Well, if you didn’t contribute to your RRSP by midnight on Wednesday, you’re out of luck; and if you want to start investing or build your investment, you’ll have to settle for putting that contribution to next year’s taxes. On Wednesday we talked about the number of Canadians that would put off contributing to their RRSP until the very last minute, and how many employed this strategy year after year. But, just how many people contributed to an RRSP at all this year? The number of people who actually contributed is down from last year; but those who did contribute put away more than they did last year. Maybe it balances itself out? If that was only the way it worked.
A Bank of Montreal survey recently showed that 38% of people invested in their RRSPs for the 2011 tax year. While that number is down from last year’s 39%, it is only slightly slow, and it’s the same amount of people who contributed for the 2009 tax year, keeping numbers pretty much consistent for the past three years. This year, those who did put money away into their RRSPs put a little more in, with an average of $4,670 this year compared to last year’s $4,538. The good news is that there’s not a huge gap between the numbers, meaning that we probably shouldn’t panic that not enough of us are saving for our retirement. What we should do though, is look at why our numbers are down, as it points right back to what the Canadian government has been saying about our debt levels.
Of those surveyed 9% didn’t invest due to uncertainty in the economy; and 14% didn’t invest in RRSPs this year because they thought they already had enough for retirement. That number does seem a bit high for people who think they’re prepared and it probably never hurts to put a little more away; but it may be reassuring nonetheless. Especially when you consider that the majority – 61% – said that they did not invest in RRSPs this year because they didn’t have enough money. That does ring true with Finance Minister Jim Flaherty’s continuous warnings about household debt, the government’s tightening of HELOC and other second mortgage rules, as well as Bank of Canada governor Mark Carney’s repeated caution that interest rates will not stay this low forever.
Sun Life Financial advisor, Brian Burlacoff, says that even with the slight dip this year, he believes that we’re going to start seeing more people contributing to their RRSPs. He points towards the fact that the government is also looking to raise the minimum age on Old Age Security, and the fact that employers are also no longer offering the retirement benefits that they once were, as reasons why we’re starting to take it more seriously. Burlacoff says, “People are starting to see that the government’s not going to be there for us when we’re 65. People are starting to realize tha they’ve got to fund themselves.” However, he also says, “What we’re not so good at doing is a plan.”
From this year’s number, that seems to be true.
