A little more than a third of Canadians have contributed or plan to contribute to an RRSP for the 2009 tax year, which is the lowest proportion of contributors since 1996, according to the annual RBC RRSP poll released Wednesday.
The economic downturn was cited as the main reason why past RRSP contributors are either reducing their contributions this year or postponing until next year.
Many Canadians are waiting until the last minute to contribute to their RRSPs. About 35% said they plan to make their one-time contribution just before the March 1, 2010 deadline. Only a quarter of respondents plan to maximize their RRSP contribution for the year, although, younger Canadians aged 18 to 34 were the most likely to make the maximum annual contribution.
The recession seems to have deflated people's desire to plan for retirement at all. About a third of respondents said they have not started saving for retirement yet, up from 24% of respondents last year.
Only 36% are planning or have a plan in place for retirement, down from 42% in 2008. The decline was most noticeable among those aged 55 and over with only 53% doing any retirement planning compared to 67% of respondents near retirement.
A Desjardins retirement survey suggested fewer baby boomers plan to completely retire, which may lead to a less dramatic exodus of boomers than expected. About 31% of boomers between 53 and 62 years of age said retirement was more than five years away and only 23% hope to stop working completely.
Close to half (47%) said they hope to transition to retirement by gradually reducing hours, which is far more than the one in five current retirees who retired gradually.