The RRSP contribution deadline (February 29) is fast approaching, but only 37% of Canadians say they will contribute to RRSPs for the 2015 tax year, on average, says a CIBC poll. This is the case even though a vast majority (75%) are worried about retirement.
For those not contributing this year, competing financial demands are the primary reason. Two in five respondents (41%) say they don’t have the money, while 14% say they have other financial priorities such as paying down debt or buying a home, and 17% prefer to invest in TFSAs or other options.
If you break down who’s contributing by age, says the poll, these are the findings:
- 44% of those between 18 and 34-years-old will contribute to RRSPs for 2015, while those remaining are unsure or don’t plan to;
- 48% of those between 35 and 54-year-olds will contribute to RRSPs for 2015, while those remaining are unsure or don’t plan to; and
- only 21% of those who are 55-years-old or older will contribute to RRSPs for 2015, while those remaining are unsure or don’t plan to.
“The conundrum for many Gen Xers, in particular, is they have [simultaneously] reached their crucial saving years and peak spending years,” says Christina Kramer, executive vice president of Retail and Business Banking for CIBC. “Whether [they’re] paying down mortgages, supporting kids or helping elderly parents, they’re being pulled in competing directions.”
One way to help clients is to remind them that the February 29 deadline only applies to contributions made for 2015 tax returns. If people aren’t contributing solely for tax reasons, they can still put money in to stay on track with savings goals and plans.