An interesting thing happened on the way to retirement. A bun­ch of folks lost buckets of money, not just once but many times since 1997. And that explains, in part, why RRSP contributions have fallen off since then, particularly in the 55 and older group.

A new RBC study shows that RRSP contributions, as a percentage of income, have declined among the under-34 crowd as well. But that result is likely because of higher student debt, more expensive housing and higher costs relating to raising a family.

These two age groups, the boomers and the Gen Xers, with their shrinking RRSP contributions, stand to face skinny retirements if they don’t ramp up savings. Fat workplace pension plans are increasingly a thing of the past — heck, any workplace pension for that matter. So the average Canadian is going to have to rely on RRSPs to top up old age security and CPP cheques.


Boomers worried about losing retirement money, like the last time the market tank­ed, should keep contributing, but put less of it in stocks or equity (stock) mutual funds.

No more than 50 per cent of your RRSP funds should be in the market, and when you hit your late 50s, the equity portion should shrink steadily until retirement. Instead, think bonds, preferred shares and GICs. I know, interest rates stink, but you are better off earning two or four per cent on your tax-sheltered money than losing 20 or 30 per cent during a downturn.

The younger crowd may protest that their debt leaves no room for RRSP contributions.

However, even small amounts deposited regularly at a young age will grow healthily if you don’t take on too much stock market risk. As for debt, take the tax refund generated by your contribution every year and dump it on your highest interest debt.

– Alison Griffiths is a financial journalist, author and host of Maxed Out on the W Network. Write to her at