More and more junk mail to my house berates me for not joining in on the RRSP “silly season” to get that last little bit of RRSP contribution in for this year. It’s an interesting time of the year, and I want someone to call me to talk about this so I can ask,
“Where do you think I have this extra money stashed?”.
We have just finished Christmas and its inherent spending frenzy, my pay cheque has CPP and EI on it again (so not only must I pay huge bills, I have less net income to do it with) and it is assumed I have spare money to buy RRSP‘s with? I may only have a Mathematics degree, but something tells me this equation is not balanced.
I could borrow money to put into my RRSP, but that one has always made me scratch my head. I go farther into debt to save for my retirement? I guess I kind of do that with my automatic RRSP deductions at work and my CPP payments, but to actively go out and create a real debt to help me later in life just seems very wrong to me (I am willing to debate that statement, but I just don’t get why this is a good thing).
I have noticed however that there are more, “If you read our RRSP blurb and register here you might win a $10,000 RRSP” type contests, which I am signing up for. Yes, I know all they really want is my name on a list so they can bother me about buying RRSPs (kind of cyclical don’t you think?), but if I win, then you’ll be the ones with egg on your faces! (yes I know the chances of winning are about as much as me making $10,000 on my financial blogging talents (between slim and none, and slim just left town)).
Any other quandaries this season causes my readers to enjoy? Do you buy RRSP’s now, or do you buy them little by little over the year?
what a great post. And congrats on being in the 30% of eligible cdns who contribute at all to their rrsps, much less one of the few who do it regularly through the year.
And that is the point, if I only put money in during the Silly Season I’d have no money in my RRSPs at all. I have “direct scrapes” off my income for RRSP’s and such which slowly build retirement savings, so that I don’t have to rely on my own ability to save, it simply happens and once it is inside the “Walled Garden” of my RRSP (or RESPs) I seem to be able to respect those walls. Anything that appears in my chequing account is fair game to be spent frivolously.
I suspect that a lot of people feel the same way you do. They have no money right now to put in their RRSPs. Maybe the “pay yourself first” philosophy would help. People could arrange to have some money pulled out of their accounts and put into an RRSP after each time they are paid. While they’re at it, they could have some money put aside to pay for their next car the same way. The theory is that there will be less money available for other spending, but they won’t miss it much. This would probably work for most people.