Money & Career

Are you paying off debt or saving for retirement?

In 2012, Canadians focused more on reducing debt than contributing to their retirement plan.

retired couple, older man and woman drinking red wine, cottage by lake


It’s RRSP season and no doubt your bank or mutual fund company is trying to get you thinking about the future; images on posters and brochures of people retired in Italy, sailing the Caribbean or strolling on a tropical beach without a care in the world.

If you’re like me, that world is miles away. I’ll be lucky if I can retire at 70 the way my portfolio is going. Turns out I’m not alone. Why? It turns out most people are too saddled with debt to think about saving for the future.

An Investor Education Fund poll in 2012 asked participants to rank their top financial resolutions. The number one goal listed by 57 percent was reducing debt loads – and that’s not mortgage debt, since only 1.5 percent were focused on paying off mortgages. The other top priorities of 2012 included building an emergency fund, creating a budget to track spending and using credit cards responsibly.

So what about saving for retirement? Only 10 percent were going to open or contribute to a Tax-Free Savings Account (TFSA) and a mere 6 percent were planning to open or contribute to a Registered Retirement Savings Plan (RRSP).

Retirement saving tends to be a low priority for many Canadians. The reality is that the majority of us are working to pay off past purchases in the form of debt payments. Paying for the past trumps saving for the future – at least for now.

Below is the full 2012 list of financial priorities from

Top 10 financial resolutions for 2012

1. Reduce my debt load
2. Create an emergency fund
3. Create a budget to track my spending
4. Use my credit card(s) responsibly
5. Set up an automatic savings plan
6. Open/contribute to my TFSA
7. Start tax planning now for 2012
8. Open/contribute to my RRSP
9. Pay off my mortgage
10, Lower planner/advisor fees

How do your financial resolutions compare? Are you planning to contribute to your RRSP or TFSA this year?