Canadians’ total RRSP contributions fell in 2022 after pandemic spike: StatCan

The number of Canadians contributing to registered retirement savings plans in 2022 shrank overall, a new report shows.

The proportion of tax filers claiming RRSP contributions between the ages of 25 and 44 years decreased the most, according to a Statistics Canada report released Tuesday.

However, among those who did add to their RRSPs that year, those between the ages of zero and 34, were the only age group that increased the amount they contributed.

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Overall, RRSP contributions were down 3.4 per cent in 2022 when compared to the year prior.

“This decline in annual contributions followed increases in 2020 (+13.1 per cent) and in 2021 (+12.2 per cent) and reflects broader movements in household savings over this period,” the federal agency said.

“The proportion of tax filers making an RRSP contribution (-0.7 percentage points to 21.7 per cent) also decreased in 2022, resuming a 12-year (2008 to 2019) downward trend that paused during 2020 and 2021, when household savings peaked early in the COVID-19 pandemic.”

The findings build off recent reports on retirement and unaffordability; high inflation, which peaked in 2022, impacted Canadians’ wallets and their ability to save, and only 35 per cent of Canadians over 50 who planned to retire felt they were financially prepared to do so, said Toronto Metropolitan University’s National Institute on Ageing in January.

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Meanwhile, Canadians ages 28 to 44 who participated in a BMO survey in February said they think they need about $2.1 million to retire, the highest among all adult generations.

The survey added 37 per cent of Canadians are putting less money toward retirement savings, while 38 per cent of Gen Z respondents (ages 18 to 27) said they are putting off saving for retirement completely.

Those findings were reflected in Statistics Canada’s data on Tuesday, which found the proportion Canadians reporting RRSP contributions in 2022 decreased in all age groups.

However, contributions among Canadians ages 25 to 34 years and 35 to 44 years declined the most (-1.0 percentage points each).

Canadians ages 45 to 54 years remained the most likely to make RRSP contributions, with 36.4 per cent having done so in 2022, followed by tax filers aged 35 to 44 years (32.6 per cent) and those aged 55 to 64 years (30.7 per cent).

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Of all age groups, Canadians ages 55 to 64 years had the largest decrease in total RRSP contributions (-6.1 per cent), followed by tax filers aged 45 to 54 years (-4.5 per cent).

Those two age groups drove the overall decrease in RRSP contributions in 2022, while the two youngest age groups, zero to 24 years (+3.0 per cent) and 25 to 34 years (+0.7 per cent), were the only groups with an increase in total RRSP contributions.

In total, tax filers contributed $54.2 billion to RRSPs in 2022, with a median contribution of $3,910.

Yukon had the only increase among provinces and territories in total RRSP contributions in 2022, up 3.6 per cent and a continuation of an upward trend that started in 2019, Statistics Canada said.

Meanwhile, the Northwest Territories (-17.2 per cent) and Nunavut (-11.6 per cent) had the largest relative declines in total contributions and in number of contributors (-6.2 per cent for the Northwest Territories and -7.4 per cent for Nunavut).

Nunavut ($4,560) had the highest median RRSP contribution nationally in 2022.

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Furthermore, the proportion of RRSP contributors in 2022 depended on the income bracket of the tax filer, Statistics Canada said.

In 2022, the proportion ranged from 1.7 per cent of tax filers with incomes below $20,000, to 66.2 per cent of Canadians with an income from $200,000 to $499,999.

From 2021 to 2022, median RRSP contributions fell or remained constant for all but the two highest income brackets: for tax filers with incomes from $500,000 to $999,999, and for those with incomes of $1 million and over, median RRSP contributions rose to be equal to the maximum claimable amount for the tax year, which was $29,210.