RRSP contributions to drop

The RRSP contribution deadline is looming. Yet only 31% of Canadians intend to top up their plans this year, finds a Scotiabank poll.

That’s a drop from 39% in both 2012 and 2011, with most Canadians (74%) admitting they can’t afford to contribute funds.

Read:

• Top tax tips for clients: Golombek
• 6 ways to help cash-strapped retirees

Most alarming is nearly half of those with registered plans across the country (40%) have withdrawn funds this past year, up 4% from 2012. Most people did so to buy a home (16%), but others used the money to cover living expenses (8%) and pay down debt (8%).

Read: Boomers drag down average RRSP contributions

If affordability is an issue for those who want to contribute, advisors should help people come with solutions so they can benefit from tax savings and retirement planning, says Mike Henry, a senior vice president at Scotiabank. He suggests planners discuss pre-authorized payment plans and the potential benefits of borrowing to invest.

Read:

More have TFSAs

Most Canadians ignorant of tax deadlines

How to tax-loss harvest

Clients should withdraw from RRSPs early

Don’t whiff on RRIFs

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.