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  • richardmkiernicki

The Unconventional Conventional, Part VIII

Updated: Aug 6, 2019

This week we shall digress from the norm of RSP bashing and bring readers up to date on some other important topics associated with retirement planning that have just been brought to my attention. We still have a few more weeks of RSP season left to go and I still want to finish my dialogue on why RSP’s may not be the be-all-end-all solution to a happy retirement, but these facts are worthy of mention at this time. Financial Advisors take note; your clients do not have sufficient funds to retire.

Reported in yesterdays online edition of, in an article about Helping Generation Y’ers build retirement assets, a couple of eye-opening statistics were revealed from StatsCan. In 2010 less than 6 million tax filers made RSP contributions. And more importantly, only 5.1% of the available contribution room was used up. That means that a staggering 94.9% of the available contribution room was not utilized. We could estimate the actual dollar amount of unused contribution, however, suffice to say that it is a huge amount of money from which we can deduce that Canadians may not be making sufficient contributions to fund their own retirement. In support of that conclusion drawn by Steven Gillespie at Envision Financial is that “The reality is that few Canadians, and even fewer people in their 30’s, are adequately preparing for retirement.”

In today’s an article from the Financial Post entitled “Saving for Retirement Becoming a Struggle for Canadians” brings to light an RBC poll that states that “Canadians are increasingly concerned about their ability to finance retirement because of saving for their children’s education and caring for ageing parents”. They also cite that there have been many surveys, reports and warning signs recently that have suggested Canadian’s, especially those close to retirement, have either not saved enough, are still in debt or are being forced to work longer. I am not convinced that Canadians “are richer than they think.” In fact, I think that Canadians are actually poorer than they think.

The evidence seems to be quite clear, that a large number of Canadian’s, due to a number of varying factors, do not have sufficient financial resources to meet their overall day to day financial needs, to plan for retirement and then to really enjoy their “golden years”.

Who is responsible for this? The people, the government, the financial institutions? It is not an easy question to answer. However, the need to bring this information out in the open presents an opportunity to create a dialogue that may lead to making the necessary changes so that all Canadians can look forward to retiring with dignity. I want to start that dialogue, so here goes, it seems that RSP’s are geared toward those that can afford to make a contribution. And if so, it rewards those that have the ability to make those contributions. In other words, it helps those that are able to help themselves and seems to avoid those that cannot.

So here’s my idea; give the largest tax break to those that have the smallest incomes and reduce the tax break for the more affluent. How’s that for a start?

Copyright 2013 Richard M. Kiernicki. All Rights Reserved.

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