How many Canadians have registered retirement savings plans?
Canada has a robust public pension system anchored by the Canada Pension Plan (CPP) and Old Age Security (OAS). These programs aim to provide Canadians with a steady stream of income during retirement. The payouts from these plans are capped. The Canada Pension Plan is funded through payroll deductions with contributions from employees and employers. The maximum amount one can receive is based on their contributions to the plan. Meanwhile, Old Age Security is funded by general government tax revenues, and the payouts are currently capped at $608.85 per person, with additional funds allotted for low-income individuals and couples. As the cost of living continues to rise, more Canadians are looking to boost their retirement nest egg by contributing to Registered Pension Plans (RPPs), Registered Retirement Savings Plans (RRSPs), and Tax-Free Savings Plans (TFSAs) to ensure they are financially secure after retiring from the workforce. Let’s dive into the data and explore how many Canadians have RRSPs, who typically contribute to the plans, and how much people generally contribute.
Number of Canadians contributing to RRSPs hits new high in 2023
According to Statistics Canada, in 2023, a record high 6,350,070, or about 21% of Canadian tax filers, contributed to RRSPs. That’s an increase of about 70,000 people from the year before, but the share of tax filers contributing stayed about the same when compared to the year before.
Males are more likely to contribute to RRSPs than females. In 2023, 51% of tax filers who contributed to an RRSP were male versus 49% female. That is consistent with previous years. Contributors tend to be middle-aged, with half of the contributors falling between 35 and 55 years old. They also tend to be higher income earners, with those with a total income of more than $80,000 accounting for 54% of RRSP contributors.
How much do Canadians contribute to RRSPs?
The median RRSP contribution in 2023 was $4,000, up from $3,910 in 2022. The median contribution of males was almost $1,600 more than that of females ($4,840 versus $3,250). Middle-aged Canadians tend to contribute more, with those 45-64 accounting for 54% of all RRSP contributions.
A multi-pronged approach to retirement savings
The cost of living is a constant concern for Canadians. Many Canadians, especially those with means, are seeking ways to supplement retirement benefits they’ll receive from programs like Old Age Security and the Canadian Pension Plan by investing in RRSPs. The increase in contributors highlights how important vehicles like these are in helping people stay financially secure during retirement.
