Canadians are expected to contribute a record $38.6 billion towards their RRSPs in 2014 but this number is minuscule compared to the $951 billion in unused RRSP contribution room. The number of contributors from 2013 to 2014 was in fact up 3.2% Fewer than 40 per cent of Canadians between the ages of 25 and 64 actually contribute to their RRSPs during the year. Despite the slight increase in contributors, in general the number of people who use the RRSP tool annually stays around six million. The same kinds people appear to be saving via the RRSP investment vehicle year over year, where more Canadians should be looking at this option.

The advent of TFSAs provides a different investment option for Canadians. Although not specifically for retirement, TFSAs are designed as tax free vehicles, meaning all of your gains will never be taxes. RRSPs are tax deferral tools, meaning you defer tax paid today, the idea being you’re in a higher tax bracket today, for a time when your retire and earn in a lower tax bracket thereby saving the difference.

In a market with higher unemployment (recession periods) saving tends to outweigh spending and RRSP contributions can in fact increase during tough financial times. However, when faced with tough choices, putting away for your future takes a backseat to paying expenses today.

Don’t forget, the annual deadline to contribute to an RRSP so it applies to the previous year’s income is March 1.