Luxuries come before RRSPs for many Canadians

With tax season approaching, Canadians young and old are starting to get their shoe boxes organized, for what is often a grueling process of accounting, that, among other things, reveals how much we can safely contribute to the coveted tax shelter known as the Registered Retirement Savings Plan.

With tax season approaching, Canadians young and old are starting to get their shoe boxes organized, for what is often a grueling process of accounting, that, among other things, reveals how much we can safely contribute to the coveted tax shelter known as the Registered Retirement Savings Plan.

But, at a time in their lives when they should be planning for retirement, or at least looking for any tax break they can get, almost half of Canadians (43%) aged 35 to 44 have no RRSP.

Even though they have the household income to support a modest RRSP, they prefer to spend their money on other investments or the luxuries of life, including vacations, jewelry, CDs, and lottery tickets.

Eighty per cent of 35- to 64-year-olds with no RRSP have shopped at HMV at least once in the past year, 76% shopped at gardening stores, 58% shopped at stereo stores and 35% shopped at jewelry stores. Not just shopping for luxury items either, 33% spent $2,000 or more for their last vacation.

Perhaps the most interesting fact about older Canadians with no RRSP is that just over half have some form of savings ($5,000 or more) outside an RRSP and 36% of them have over $20,000 socked away. Just by transferring these savings into a self directed RRSP would earn these people a handsome tax break.

Lottery tickets are popular among all Canadians, but you have to wonder about priorities when 31% of Canadians without an RRSP manage to spend $20 or more per month on lotteries – almost half (49%) spend $10 or more.

Media consumption habits among Canadians 35 to 64 without an RRSP are pretty much average, with radio and TV being the top two in terms of reach. So who knows? A clever ad message speaking about the many benefits of an RRSP could bring in substantial new business.

The preceding information is from BBM RTS, a syndicated consumer-media survey of over 55,000 Canadians, conducted twice a year by BBM Canada. For more information please contact Craig Dorning of BBM Canada at: cdorning@bbm.ca.