The deadline to contribute to a Registered Retirement Savings Plan (RRSP) is drawing near, and apparently quite a few Canadians are leaving their contributions to the last minute.
Thirty-one per cent of eligible Canadians still planned on making a contribution before this year’s cutoff date, according to a poll conducted by Harris/Decima for CIBC from Feb. 13-17.
This year’s RRSP deadline is March 3, now less than a week away.
Out of that 31 per cent who still wanted to contribute so close to the deadline, just under half hadn't made any contributions for that tax year, while the remainder had, but planned to contribute more.
The poll showed those most likely to procrastinate on planned RRSP contributions were between the ages of 25 and 44. CIBC said previous research indicated younger Canadians often need to balance their savings with debt repayment, which can result in delaying contributions.
A previous poll conducted in November 2013 for RBC said only 23 per cent of Canadians planned to contribute the maximum amount allowed. Younger Canadians are less likely to have the cash to make the maximum contribution, CBC noted, but just 20 per cent of people between the ages of 35 and 54 and 25 per cent of people over age 55 said they’d contribute the full amount.
Senior Manager with RBC Financial Planning Richa Hingorani said putting money aside on a regular basis can help make the process more affordable.
"Maxing out your contribution at the start of the year is great if you can afford it,” she said in a press release, “but for most Canadians, regular contributions throughout the year is a more realistic and effective approach.”
Christina Kramer, CIBC’s Executive Vice President, Retail and Business Banking, also noted the benefit of saving throughout the year, rather than scrambling to find cash close to the cutoff.
“Some Canadians find it difficult to come up with a lump sum for their RRSP, underscoring the importance of creating a budget and a regular savings plan for the year ahead to avoid the last-minute crunch," she said in a news release.