According to a recent survey by the Bank of Montreal (BMO), about 65% of Canadians have contributed to their RRSP account before the March 3rd, 2014 deadline, for an average of $3518. Are you among them? If not, don’t worry about it too much there are alternatives.
Although more Canadians (2% increase approximately) have devoted part of their savings to this type of account compared to last year, the average amount of contribution has decreased by $26, going from $3544 in 2012 to $3518 in 2013.
Two thumbs up to everyone of you who contributed, but what happens to all the people who haven’t? Is it the end of the world? Definitely not. While, it’s a good habit to contribute yearly, those savings are cumulative and even if you miss this year’s deadline the money you put aside (no matter the time of the year) will still go towards putting together a decent retirement fund. Just make sure that you do put some money in a RRSP account at some point.
The RRSP Alternatives
There are several options out there, including getting a tax-free savings account (TFSA) and/or a registered education savings plan (RESP). The former being really flexible and the latter enabling you to potentially pay outstanding debt. Whichever option(s) you decide to go for in the end, you should definitely make sure to establish a solid plan for your retirement and not only think about it on the few days preceding the yearly RRSP deadline.
Anyway, now it’s time to get your taxes filed. Do you have a plan yet? Are you going to hire an accountant or are you considering filing them yourself? You should read this post listing all the best deals on tax software in Canada to help you make your mind. Depending on how complex your financial situation is, it could be a very interesting option.