You're not the only RRSP procrastinator out there

If you’re scrambling to see how much money you can gather as the clock ticks down to another RRSP deadline, congratulations. You’re probably doing more for your retirement than most Canadians.

According to Statistics Canada, only 22.9% of all tax filers in Canada contributed to their RRSP in 2015. That’s the lowest on record. In 2000, which is as far as the data goes back, that figure was closer to 30%. But the number of people contributing to their RRSPs isn’t the only troubling trend.

What’s your RRSP contribution limit? »

More than 90% of Canadians have unused RRSP room. Put another way, it means fewer than one in 10 is getting the full tax benefit from the retirement savings. The data suggests most Canadians are just making token contributions to their retirement savings.

The average RRSP contribution is just $6,500, but the median contribution is more telling. Half of Canadians invest $3,000 or less into their RRSP each year. If you take inflation into account the median contribution has fallen 16% over the past 15 years.

Fewer Canadians are contributing to their RRSP

To put that in some context, a $3,000 contribution for a salaried employee earning $50,000 a year in Ontario can expect a meagre $848 tax refund.

According to Statistics Canada men are slightly more likely to make contributions than women, continuing a trend that has been more or less unchanged for the past 15 years. Of those making contributions in 2015, 53% were men.

Remember if you’re racing to beat the March 1 deadline you don’t need to decide how you want to invest that money right away. You will earn the tax deduction as soon as you make your contribution and make your investment decisions later. Just don’t wait too long. The main advantage of putting your money into an RRSP is that the funds in it can grow tax free until you need them in retirement. Leaving your money in cash for an extended period of time does little to help you reach your goal.

If you’re just starting out or if you’re not comfortable making investment decisions, investing in an RRSP can be intimidating. But relax, there are options. If you have limited RRSP savings then a simple, low-cost balanced fund could suffice until you have more money to invest or once you have a better sense of your risk tolerance. The Canadian Couch Potato is another simple, low-cost option or speak with a financial planner.