Canadians’ Savings Styles, by Generation

We don’t all use the same tools to save for retirement

By Katrina Caruso


Despite alarming reports about household debt, the majority of Canadians are actively saving for their retirement, according to the latest figures from Statistics Canada. The last census was the first time Canadians were asked about their saving.

Data from 14 million households revealed that just under two-thirds of us, 65.2%, are contributing to a registered pension plan, an RRSP, or a tax-free savings account (TFSA). Interestingly, only 9.4% of Canadians are saving using all three methods.

While the news is encouraging, the figures also mean that nearly 35% of Canadians are not putting away money for their retirement. And the numbers are a bit more bleak when broken down by generation: according to a recent poll by RBC, only 38% of millennials (those 25 to 34) are saving for retirement, though nearly half (46%) of the millenials polled said that they believed it was one of their main saving priorities.

The census also showed an increase in Canadians saving through TFSAs—40% of respondents. Introduced in 2009—and perhaps less well-established among older Canadians than RRSPs—the TFSA was the most popular savings tool among younger Canadians (those aged 15–34—perhaps some good news: one in three of those 15–24 had a TFSA). Withdrawals from a TFSA aren’t taxable, so are TFSAs are a logical choice for someone who may need easy access to savings to buy a house or pay bills. TFSAs were also No. 1 among those 55 or older.

RRSPs were the most popular choice among those 35–54—those making the most money. Withdrawals from an RRSP are taxable, but contributions to an RRSP get you a tax break. This group was also most likely to save through both RRSPs and TFSAs.

Recent reports have suggested that the 35% of Canadians who aren’t saving for retirement simply can’t afford to, so it should come as no surprise to learn that, in a recent CIBC poll, respondents in all adult generations—baby boomers, Gen Xers, and millennials—said they were having trouble saving for retirement; 53% worried that they didn’t have enough retirement savings.

Photo: iStock/AndreyPopov.