From the Knowledge Bureau
February 1, 2012
The Feb. 29 deadline for 2011's RRSP contribution is fast approaching and if you are like a number of Canadians, you may well be procrastinating. It seems that when it comes to contributing to RRSPs, Canadians' intentions are far better than their actions.
Take, for example, a recent survey of 1,520 Canadians 18 years of age and older conducted this past November on behalf of BMO Financial Group. Of the respondents, 69% said they would be contributing the same amount or more to their RRSPs in 2011 as they did in 2010.
Yet, a recent Statistics Canada release shows less than one in four Canadians contributed to his or her RRSP in 2010. In fact, although 93% of taxfilers were eligible to contribute, only 26% of those who were eligible did. In reality, slightly less than six million Canadians made contributions in 2010. (Data is based on tax returns filed for 2010.)
Either those Canadians surveyed in November were feeling optimistic about future contributions or they were being ironic: they contributed nothing last year and they intend to contribute nothing in 2011.
So, stop procrastinating and make your RRSP contribution. Don't forget the corresponding tax credit means your taxable income will be reduced by the amount of your contribution. The BMO survey also found one in three Canadians is not confident about his or her ability to save for retirement. The StatsCan numbers go a long way to explaining why.
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