Like many younger Canadians, Toronto resident Christina Fera has found retirement saving hasn’t come easy. Between student loans and everyday expenses, she picked up side gigs and a part-time job and now manages to save about $40 a month in her RRSP.Jennifer Roberts/The Globe and Mail
Saving for retirement hasn’t come easy for Christina Fera, 26, who lives alone in Toronto.
Between paying off $300 a month in student loans and covering everyday expenses, the public relations specialist found little room to set money aside – until she picked up side gigs dog-sitting and working part-time at a gym. Now, she manages to save about $40 a month in her registered retirement savings plan.
For Nour Aziz, 32, contributing to her RRSP isn’t a priority.
“The last thing on my mind is an RRSP,” said Ms. Aziz, who works in education. Most of her paycheque goes toward immediate expenses, and she prioritizes her tax-free savings account, setting aside about 20 per cent of her income annually.
Their struggles reflect a broader trend: Young Canadians and women are planning on cutting back on RRSP contributions this year, according to a recent survey from financial services firm Edward Jones Canada. Rising living costs, lower incomes, and financial literacy gaps are among the biggest obstacles for both groups – but for young women, these challenges are compounded.
“They’re getting hit from both sides,” said Kaitlyn Douglas, a certified financial planner in Winnipeg.
RRSP contributions are expected to drop across the board for the 2024 tax year, according to the Edward Jones survey, but the decline is especially steep among young Canadians and women.
Only 41 per cent of Canadians aged 18 to 34 plan to contribute this year, a steep decline from nearly 60 per cent last year, according to the survey.
For women, the figure is even lower – just 36 per cent expect to contribute to their RRSP this year, compared to 44 per cent last year. In comparison, 43 per cent of men are expected to contribute this year.
While the survey data does not show how young women are affected specifically, Ms. Douglas said that the demographic is facing the same financial struggles as their male peers, but they also face additional challenges tied to their gender.
One major hurdle is income. Younger Canadians in entry-level jobs earn less, which can make RRSP contributions a lower priority. Women, on average, also earn less than men, which can limit their ability to save.
In 2022, women aged 20 to 54 earned, on average, 12 per cent less than men, according to Statistics Canada.
Statscan data also found that women are more likely to contribute to their RRSP than men at most income levels, but they are also more likely to earn lower incomes, causing smaller RRSP contributions overall.
Young people in lower tax brackets often opt to put money toward a TFSA, which offers more flexibility on withdrawals, or a first-home savings account, which can align more closely with their short-term goals, said Adam Jenkins, a certified financial planner in Kingston.
“I don’t want to be screwed with having to owe that money back,” Ms. Aziz said, explaining why she prioritizes her TFSA over an RRSP.
Retirement savings for women are also impacted because they are more likely to step away from work for childcare, which creates gaps in income and long-term savings.
The gender pension gap in Canada, which represents the difference in retirement income received by men and women, stands at about 17 per cent. That means that for every dollar of retirement income that men receive, women get only 83 cents, according to a 2024 report from the Pay Equity Office in Ontario.
Women also live longer than men, so they need their retirement savings to stretch even further, said Jason Heath, certified financial planner and managing director of Objective Financial Partners.
Another key challenge for both young Canadians and women is a lack of financial literacy.
Only 27 per cent of women recall learning about money management in school, compared to 35 per cent of men, according to a 2024 survey from Edward Jones. A separate 2023 study found that just 40 per cent of Canadians felt financially prepared after graduation.
Both Ms. Fera and Ms. Aziz had to teach themselves financial basics.
“I just feel like amongst women, it’s not something that we talk about a lot,” Ms. Fera said. “More women should be talking about it and exchanging information because our perspective is different from our male counterparts who are probably making more money.”
Despite these challenges, financial experts stress that young women have one crucial advantage: time. Even small RRSP contributions can grow significantly through compound interest, said Julie Petrera, senior strategist at Edward Jones.
“Don’t feel like you’re behind because behind is only relative to where you want to be,” she said.