WINNIPEG – Retirement savings aren’t on the priority list for some Winnipeggers.
Five Winnipeg neighbourhoods are among the 10 lowest in the country (out of almost 5,000) when it comes to RRSP contributions, Global News analysis of Statistics Canada taxfiler data shows.
The city’s median contribution among those few who do contribute is about $2,120, several thousand below the national average.
The Burrows, Weston, Daniel McIntyre, Centennial and Chalmers areas had median contribution rates of $1,040 to $1,200 for 2011. The median is the middle number, with half of tax filers in the area contributing more and half contributing less.
Burrows had the lowest contribution rate in Canada, at $1,040; the five neighbourhoods were all on the list of 10 lowest-contributing census tracts.
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Wherever possible, Global News has tried to make adjustments for neighbourhoods with a large proportion of senior citizens. For example, while Winnipeg’s North Point Douglas neighbourhood had a median contribution rate of only $1,000, it wasn’t included in the listing of the lowest contribution rates out of concern a large seniors’ residence in the neighbourhood had skewed the numbers.
David Northcott, executive director of Winnipeg Harvest, is not surprised by the low contribution rates. It’s all about survival for most living in those neighbourhoods, he said — food, shelter and rent all come before savings.
“The old saying, the best time to have planted a tree was 25 years ago, the best time to have done this kind of saving was 25 years ago, but if you’re sweating it out on food, shelter, education costs, anything to do with kids, you usually don’t have money left over,” said Northcott.
While income often is a factor in RRSP contribution rates – people who don’t earn much often can’t invest in RRSPs – some of the five lowest-contributing neighbourhoods aren’t Winnipeg’s poorest.
Chalmers had a median RRSP contribution rate of $1,200 and a median family income of $54,900, which does not place it among the city’s poorest neighbourhoods. Weston, with a median contribution rate of $1,100, had a family income of $53,550, while Burrows had a contribution rate of only $1,040 and an income of $52,480.
But Winnipeg’s wealthiest neighbourhoods are predictably among those that contribute most to RRSPs, with Crescentwood, areas around Assiniboine Park and Linden Woods among those posting median contributions of more than $4,000.
But any contribution is a good investment, said University of Manitoba finance Prof. John McCallum.
“At five per cent, $100 invested this year in 35 years from now will be worth about $550. So the power of compounding interest will leave people with a great deal of money if they stick with it,” McCallum said.
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