Overall contributions also decreased in 2022, says Statistics Canada
Fewer Canadians contributed to registered retirement savings plans (RRSPs) in 2022 compared to the previous year, according to a report from Statistics Canada (StatCan).
A total of 6,268,950 Canadians contributed in 2022, down 0.5% from the previous year.
The 2022 number of contributors equate to 21.7% of taxpayers.
Canadians are favouring a Tax-Free Saving Account (TFSA) over RRSPs, according to a report from the Canadian Imperial Bank of Commerce (CIBC) released in February.
Among provinces and territories, Ontario had the biggest number of RRSP contributors in 2022 at 2,286,110, though that number was down 1.2% from 2021, says StatCan.
Meanwhile, Quebec had the second highest number of RRSP contributors in 2022 at 1,752,470, up 0.4% from 2021.
How much do Canadians contribute to RRSP?
Overall contributions also dropped in 2022 compared to 2021, according to StatCan.
In 2022, tax filers contributed just over $54.2 billion to RRSPs, down 3.4% from 2021.
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Source: Statistics Canada
Most of the 2022 contributions came from Ontario ($20.55 billion) and Quebec ($14.87 billion), though both were down 5.6% and 1.6%, respectively, from 2021.
The 2022 median contribution from Canadians was $3,910, up 0.5% from the previous year.
The full details on the number of contributors and total contributions from each Canadian province and territory is available on the StatCan website.
Just over half (51%) of Canadians planned to contribute to their RRSPs this year, according to a previous report from Edward Jones.
What is the purpose of the RRSP contribution?
Why do workers contribute to their RRSPs? Here’s why, according to Royal Bank of Canada (RBC):
- They use an RRSP to save for retirement while also saving for anything in a TFSA.
- Contributions reduce your annual income, lowering your tax bill.
- Taxes on your investment income are only paid when withdrawn.
- You can borrow money from your RRSP to go to school or buy your first home without penalty, provided it is repaid within the required time.
- You can make up for missed contribution room from previous years.
Over six in 10 (63%) Canadians with household investable assets of at least $100,000 are somewhat (49%) or strongly (14%) confident in their retirement prospects, according to a previous report from LIMRA.