According to census data recently released by Statistics Canada, almost two-thirds (65.2 per cent) of Canadian households are reportedly saving for retirement.
Of the 14 million households that made a contribution, 30.1 per cent used a registered pension plan, 35 per cent used a registered retirement savings plan (RRSP), and 40.4 per cent contributed to a tax-free savings account (TFSA). The contributions were made in 2015, which is the most recent year when data was available, as this is the first time the census sought out to measure retirement savings amongst Canadians.
Canadian households saving for retirement |
|||||
| Age of principal earner | RRSP | RPP | TFSA | All 3 | Total |
| 15-24 | 14.3% | 15.1% | 33.5% | 3.1 | 45 |
| 25-34 | 37.3 | 34.8 | 42.0 | 10.7 | 67.9 |
| 35-44 | 45.0 | 41.4 | 35.9 | 11.4 | 72.2 |
| 45-54 | 47.6 | 43.0 | 38.8 | 13.3 | 74.2 |
| 55-70 | 36.5 | 27.3 | 42.7 | 9.6 | 65.4 |
| 71 or over | 4.0 | 1.6 | 43.7 | 9.4 | 45.6 |
| Canada | 35.0 | 30.1 | 40.4 | 9.3 | 65.2 |
How you save could depend on your age
Census data also showed the preferred savings vehicles by age. Those under the age of 35, as well as low-income families preferred to use TFSAs to save. This makes sense from a tax standpoint since RRSP contributions tend to really benefit those with higher incomes.
RRSPs were preferred by those aged 35 to 54 (45 per cent), likely because many in those group were already using their RRSP before TFSAs were introduced in 2009. That being said, this age group was also the most likely to use a TFSA in addition to an RRSP. And since this demographic is within prime earning years, they may have opted to use a TFSA after maxing out their RRSP.
Those over the age of 54 seemed to favour TFSAs (43.7 per cent), most likely because they have considered their income in retirement and decided to use a TFSA to minimize their tax bill when they begin to withdraw money in retirement. In comparison, 45.6 per cent of those aged 71 and over saved in a TFSA, possibly because saving at that age is less of a priority, specifically for retirement.
35% reportedly not saving anything
According to Statistics Canada, the other 35 per cent of Canadian households are not saving anything. And while there is no hard data to back up that claim, it’s likely because this percentage is facing high amounts of debt or is earning too little. It’s also possible that they’re simply spending all their disposable income.
Out of those aged 15 to 24, 55 per cent didn’t save at all, which may not be surprising since they’re either students or have just started their careers, and are making little income. Those aged 45 to 54 were the biggest savers as 74 per cent reported they were putting aside money for retirement. This is possible since those in their late 40s and early 50s likely have established careers, and the major expenses of having a child are likely behind them.
The retirement savings survey also didn’t factor in real estate. Thus, it’s possible that some people are putting all additional funds towards mortgage payments instead of a retirement fund.
The data available doesn’t give us enough to really dive deep into Canadian saving habits, but it is encouraging that many of us are saving for retirement, especially as we face a higher-interest environment, and a shift in Canadian household financial priorities may be on the horizon.