Navigating This Year’s RRSP Season During a Pandemic

It’s bound to be one of the most stressful RRSP seasons many Canadians have ever faced. March 1st is the 2021 deadline to contribute to RRSPs for 2020, and while this is normally a time people should be concerned with the money they’re saving for retirement, many are instead faced with a difficult financial decision to make: “Do I invest in my future or have a little extra money right now to weather the still-lingering pandemic?”

This is a reality our recent Financial Stress Survey identified. In it, respondents indicated they were taking immediate and drastic financial steps to alleviate the financial pressure the pandemic was causing. This included 15% who completely stopped contributing to their retirement savings plan, with a full 43% who agreed the pandemic was going to have a major impact on their retirement preparation.

Additionally, some of our respondents were taking on credit debt and even dipping into their emergency funds to make ends meet. About 80% of respondents indicated they were feeling at least moderate financial stress brought on by the pandemic – it’s clear that drastic times have called for drastic measures. But what does that mean for this year’s RRSP season?

Retirement Savings can Increase Financial Confidence

Retirement can seem like a distant concern when facing when facing short-term financial challenges. Some individuals may consider skipping RRSP contributions in the current climate.

But neglecting retirement savings for money now likely only delays financial stress until later.

Skipping RRSP contributions also means missing out on tax benefits right now. Canadians who save to their RRSP by March 1st can reduce taxes, and possibly boost a robust tax return.

The point is this – saving for retirement with an RRSP shouldn’t be something that contributes to financial stress. It’s something that can build financial confidence now and for many years to come.

How do I know I’m Making the Right Financial Decision?

It’s important to remember that the information in this article is meant for general advice – everyone’s financial situation is different, which is why seeking independent advice is such a good idea. Navigating the choppy financial waters caused by the pandemic isn’t something easy, and you shouldn’t have to do it alone. That’s why Manulife can connect people to financial advisors who offer guidance on the right financial decision regardless of the current stresses being faced.

It’s still pretty difficult to meet face-to-face these days, which is why Manulife’s digital platform and plan member site allow members to meet with advisors remotely, to ensure people aren’t stopped from getting the financial help they need, when they need it. There’s also a variety of webinars and educational material to provide additional guidance for those looking for a financial leg up.

In the financial stress survey, 89% of respondents agreed they need help estimating how much money they’ll need for retirement. With the RRSP contribution deadline fast approaching, it’s more important than ever for plan members to get advice from a professional Manulife advisor.