Nobody’s coming

In case you were wasting time doing something useful yesterday instead of reading this blog, the message was contained in the final words.

Whatever happens will be determined most by your own actions. Not fate or macroeconomics. Just you.

Time to get real about your personal finances, given what may be coming. We all know the threats. It’s a dodgy world at the moment and the best way to insulate yourself is to either become a nun or a monk, or to build wealth. The latter is easier and faster, and you still get to screw around.

Today’s big ask: make a retirement plan contribution. This year, don’t miss.

There are 13 more sleeps (March 2) until the deadline for plunking cash or assets into an RRSP, then claiming that against 2025 taxes. Yes, you can also deduct contributions made into the new FHSA, but that’s only for the houseless and the max is just eight grand. The RRSP has it beat by a mile.

The limit to claim against last year’s tax tab is $33,810, which is serious, or 18% of earned income. The money grows tax-free inside the plan. At age 72 you can roll it over into an income fund, still retain the tax-free status and keep it rolling. Dying is no biggie, either, since your spouse gets the loot. So why would you not cut income tax, grow assets tax-free, create a lifelong income stream and protect your squeeze?

Yes, lots of people don’t have extra cash to take advantage of this. But lots do. And they’re not. This is a national retirement timebomb that will eventually, inevitable, ignite. You should act now to avoid being collateral damage.

Look at the stats. They suck.

In the last year barely more than 20% of taxfilers made an RRSP contribution – a number that’s been falling annually. The median amount put into a plan was $3,420. Seriously. Three grand.

As you might expect, people who make more money set more of it aside – which is why they will always have more. The contribution rate among those earning at least $200,000 tops 66%, or three times the average. When it comes to age, folks between 35 and 54 chunk in the most.

Also worth noting: just 13% of people make then max contribution, and polling suggests a sharp drop is about to take place in the number of Canadians who will be ponying up anything for their later years. The reasons, as you know, are too-low incomes and too-high debts.

It’s yet another legacy of our real estate fetish, as Canadians shoulder more than $2 trillion in mortgages with over a million families facing renewals this year at rates higher than their pandemic-era loans. Imagine that – paying more to carry debt on real estate that is worth less. Good thinking.

You can also see how property ownership rapes liquid financial assets by age. People under 35 have (on average) a paltry $15,000 saved. Even those a decade older have little more – $33,000. And the average plan for those aged 45 to 54 contains $72,600.

This is failure. Moreover, between 30% and 40% of all tax-sheltered retirement money sits in brain-dead, low-yield GICs and ‘high interest’ savings accounts. Ditto for TFSAs, where the level of ‘safe’ money has been pegged as high as 80%.

Like I said, this is on you. Me. Your kids. Your employees. In a country with a static population, $1.2 trillion in federal debt and running $80 billion a year in the red, it’s time to realize nobody’s coming to save you.

My pal Sinan wrote the other day about some of the ways you can build retirement assets and a tax-sheltered portfolio without having extra money. Go read it.

• Borrow the money, use the refund to repay half the loan amount and come out far ahead.
• Make a contribution in kind, which means transferring stuff you own (like an ETF or an evil GIC) into your RRSP – getting a tax break for selling yourself something you already had.
• Take money out of your TFSA to put into the RRSP, then use the tax refund to fill the tax-free account again next year.
• Open a spousal plan, contribute to it, receive the refund yourself and get money out later at a reduced rate in his/her hands.
• Have your payroll taxes reduced at work with a Tax Waiver, using form T1213. Check it out.
• And if your workplace has a group plan, sign yourself up. For the max. Today. Odds are the boss will be contributing, too.

You can choose to be a victim, cry poverty and injustice, moan and mope. Or not. It should be clear to everyone that in changed times, you change your habits. Like our dashing PM told the masses, either you are at the table, or you’re on the menu.

Thirteen sleeps.

About the picture: “Hello from Strathroy and thank you for your continued insights and wisdom,” writes Brynle. “Have been an avid reader now for about 5 years. This is a picture of our dog Mayer; one of a minority of individuals who seems to prefer, if not thrive in the cold weather. My wife and I are expecting our first kid in June. As my Pops has suggested, Mayer is soon in for a rude awakening (may even require some therapy). In anticipation of the little one I have been reflecting on how fortunate we are to be Canadian, something my wife can certainly attest to as she will be afforded up to 18 months at home on maternity leave during such a critical time with our daughter.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/17/nobodys-coming/