Fewer Canadians in their prime earning years are chipping into registered retirement savings plans (RRSPs) now than they used to, according to figures released Monday by Statistics Canada.
The data agency reports that about five million Canadians between ages 25 and 54 contributed to an RRSP in 2000. But that number fell by a sixth to 4.2 million people in 2013, despite that age group being more populous.
Canadians in that age group put $30.6 billion into their RRSPs in 2000. By 2013, that figure had fallen to $22.5 billion.
The nation's number crunchers also found more people in that cohort are withdrawing early, with 900,000 people taking money out of their RRSPs in 2000. By 2013, that had jumped to 1.3 million.
RRSPs are tax deferment vehicles — a contributor gets a tax credit up front, but must pay tax later on withdrawals, or a withholding tax for doing so before age 65. Canadians can contribute up to 18% of their income in any given year to an RRSP, to a limit of $26,010 this year.
Money contributed to TFSAs, on the other hand, gets taxed on the way in — not out — and is easy to access without penalty throughout a taxpayer's life. For 2017, the TFSA contribution limit is $5,500.
In the first year they were created, two million Canadians contributed a total of $9 billion to TFSAs. That jumped to $15.9 billion in 2013 from three million people.
But withdrawals for TFSAs are becoming more common, too. For every dollar contributed in 2013, Statistics Canada says 47 cents now gets withdrawn somewhere else.
