A new report from Statistics Canada shows that the number of Canadians contributing to registered retirement savings plans (RRSPs) in 2022 decreased overall. The biggest drop in contributions came from the age group of 25 to 44 years. However, among those who did contribute to their RRSPs in 2022, the age group of zero to 34 years was the only one to increase the amount they contributed. Overall, RRSP contributions were down 3.4% from the previous year. This decline follows significant increases in 2020 and 2021, reflecting changes in household savings over the years.
These findings highlight broader trends in retirement savings and financial preparedness among Canadians. High inflation in 2022 affected Canadians’ ability to save, with only 35% of Canadians over 50 feeling financially prepared for retirement. A survey by Toronto Metropolitan University’s National Institute on Aging found that Canadians aged 28 to 44 believed they needed about $2.1 million to retire, the highest amount among all adult generations. Some Canadians, particularly those in the Gen Z age group (18 to 27 years), reported putting off retirement savings entirely.
Statistics Canada’s data from Tuesday showed a decrease in the proportion of Canadians contributing to RRSPs across all age groups in 2022. The age groups of 25 to 34 years and 35 to 44 years experienced the largest decline in contributions. However, Canadians aged 45 to 54 years remained the most likely to make RRSP contributions, followed by those aged 35 to 44 years and 55 to 64 years. The age group of 55 to 64 years saw the largest decrease in total RRSP contributions in 2022, followed by those aged 45 to 54 years.
The decrease in RRSP contributions in 2022 was primarily driven by the age groups of 45 to 54 years and 55 to 64 years, while the youngest age groups of zero to 24 years and 25 to 34 years saw an increase in contributions. In total, Canadians contributed $54.2 billion to RRSPs in 2022, with a median contribution of $3,910. Notably, Yukon was the only province or territory to see an increase in total RRSP contributions in 2022, while the Northwest Territories and Nunavut experienced the largest relative declines in contributions.
Statistics Canada also noted that the proportion of RRSP contributors in 2022 varied based on the income bracket of the tax filer. The proportion ranged from 1.7% for tax filers with incomes below $20,000 to 66.2% for those with incomes from $200,000 to $499,999. Median RRSP contributions either fell or remained constant for most income brackets from 2021 to 2022, except for the two highest income brackets, where median contributions rose to the maximum claimable amount for the tax year. This highlights the disparities in retirement savings based on income levels among Canadians.
