Discussions

What does everyone do for rrsp's? I was watching CTV news the other day and they were saying that the average person puts $3000 in RRSP's every year. That surprised me, but then they also said it should be more: like $6000 a year. That made me wonder who has that kind of money to put away every year? My husband and I make decent money, no kids. I am sure we could save a bit more than we do but not enough to put $12000 away a year. Am I the only one who thinks that is crazy?

rrsp amounts were an average. some years you may be able to save more, but by the time you retire you should expect to have a certain amount in rrsp savings. reality says people are not saving enough toward retirement. do not forget about tfsa as well. these savings will accumulate tax free, and may in the end be more efficient than rrsp collection.

$6000 a year would be nice to have, $3000 may be the average for those that can actually contribute. Personally, I contribute maybe half of that. Could probably do a little more but don;t

If you don't see it, it makes it easy to save. Approx. 15% of my wage is put into a RRSP for myself, a spousal RRSP, and company pension plan. It is easier for me as I have it directly removed from my pay. I work approx. 500 hours of overtime each year, almost all is rolled into an RRSP. My wife started her own RRSP and same thing, taken away before we see the money in our account.

Putting away a % of your income instead of a specific dollar value may be a better measurement tool as to what you should put away.  
 
The idea is to supplement your other retirement income (Work pension, CPP, OAS, TFSA) to maintain your standard of living.  
 
A % of your gross income (I do 13.5% myself due to pension adjustments) should scale better to your standard of living than picking an arbitrary $ value.

10% of my gross wage through work and we contribute to RRSPs and TFSA outside of that. We also put more than the minimum payments down on our mortgage. Day to day we sometimes feel “poor” because we can’t “keep up with the Jones’s” and go on every vacation or buy the newest vehicles. But we will think ourselves in forty years when we retire. There’s a fine balance between saving and living in the moment. Need to enjoy life too

If you are more than 10 years from retirement, equities (stocks) are the only way to go. Cdn banks return an average of 14 percent return. Google investment calculator and plug in 300 a month at 12 percent (just in case the next 20 years aren’t as good as the last 20) and see what you get when you are 60 years old.  
Personally, unless you need the tax deductions, I would put the money in a TFSA before an RRSP.

Totally agree.....as a person who has reached 60 my RRSPs make nothing and are a tax grab...better still buy rental property as we did and top up your TFSA

Neither my husband or I have a pension plan at work. We have been putting money away in our tax free savings account. Which I guess is pretty close to the amount they want you to buy rrsp's. I guess I was thinking how can people afford to put away money for both rrsp and tfsa instead of an either/ or thing. I think about investing in stocks but I have no idea where to start or what to do first.

What rate of return are you getting with this account? My RRSP's have been averaging 7-10% return each year. When I look up interest rates for TFSA it gives me like 0.5% tp 0.75% interest rate. If that is true what is the point?

Wow Fishinguy! PM me what investment you have that is returning 7-10%! From my understanding of RSP's and TFSA's, you can buy anything from a savings account (very low interest) to GIC to Mutual funds to stocks. The bank I usually deal with actually pays higher returns for some GIC's if funds are in a TFSA than RSP, not sure why that is. No expert here, just my observations of late.

Would help you understand the TFSA better. Looks like you would benefit.

Looking into it will have to talk with my banker. Online it shows a limit of 6 grand per year. That is pretty low. I would have to find other areas to split my money over then.