Saving for Retirement

By | 12/07/2010

A recent Harris/Decima poll shows that people are investing more for their retirement.
Here are some key points.

  • 74% of Canadians either plan to, or already have RRSPs (similar to 401K plans)
  • People are planning to put more into their RRSPs this year compared to last year
  • 43% of Canadians have opened up a TFSA (similar to Roth IRAs)
  • Most people who don’t have RRSPs reported annual household incomes of less than $40,000.
  • Canadians with RRSPs are twice as likely to achieve their dream retirement lifestyle than those who don’t.
  • 27% of Canadians saw themselves as savers, while only 10% said they were investors.

Makes sense, the less you make the less you save. I’m glad that more people are taking advantage of retirement vehicles. But RRSPs aren’t for everyone. As many low income, middle aged, immigrants in this country have found out, if you are already in the lowest tax bracket and haven’t lived in Canada for too long there is very little incentive to use RRSPs, Because when you retire in 10-15 years your marginal tax rate will likely be unchanged. I would also like to see more people using TFSAs. But at the end of the day, “the key to achieving your goal is to have a plan tailored to fit you.”

Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

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