Almost one-third of Canadians (31%) are planning to leave RRSP contributions to the last minute, finds a CIBC poll. This is in line with last year, when 32% waited until the last minute.
“Our poll shows that once again, the last few days before the contribution deadline are going to be busy, as millions of Canadians make their final decisions about investing in their RRSPs,” says Christina Kramer, executive vice president, Retail and Business Banking, CIBC.
She notes that while it’s common to see a last-minute rush during RRSP season, some Canadians may be taking a risk by cutting it so close to the deadline. A CIBC poll in December found 64% of Canadians planning to contribute say they don’t yet have the money set aside to do so, pointing to the importance of starting early and saving in smaller increments throughout the year rather than trying to find the money as the deadline approaches.
“Some Canadians find it difficult to come up with a lump sum for their RRSP, underscoring the importance of creating a budget and a regular savings plan for the year ahead to avoid the last-minute crunch,” says Kramer. “Our research shows less than one third of Canadians have a regular investment plan for retirement, which highlights how important it is to set up regular contributions for next year when you make this year’s contribution.”
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Among those most likely to procrastinate are Canadians aged 25-44, with 37% saying they still need to make a contribution before the March 3 deadline. Notably, 22% of Canadians in this age group have not made any contributions to date. Canadians closer to retirement fared slightly better, with only 9% of 45-64 year-olds having made no contributions so far.
Past CIBC research notes younger Canadians are often trying to balance debt repayment with savings, which may contribute to delaying their RRSP contributions.
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“Canadians balancing debt and savings need to consider both sides of their finances when making decisions about retirement savings, which is what makes it even more important to spend some time evaluating their options before the deadline,” says Kramer.