More tax filers contribute towards Tax-Free Savings Accounts in larger amounts than towards Registered Retirement Savings Plans
In 2023, 11.3 million tax filers contributed to either a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA). Of these, 3.8 million contributed only to an RRSP, with a median contribution of $3,420. Another 5.0 million tax filers contributed only to a TFSA, with a median contribution of $6,500 (the annual contribution maximum for 2023). The remaining 2.5 million tax filers contributed to both, with median contributions of $5,000 (RRSP) and $6,150 (TFSA).
Of the 6.3 million tax filers who contributed to RRSPs, more than half the contributors (54.0%) had a total income of $80,000 or more and the majority of contributions (54.5%) came from tax filers aged 45 to 64 years.
In contrast, of the 7.5 million tax filers who contributed to TFSAs, half (50.0%) had incomes of less than $60,000, with nearly two-thirds (66.1%) having a total income of less than $80,000. Unlike RRSP contributions, there were no significant decreases in TFSA contributions among older tax filers. Of tax filers aged 65 and older, 2.3 million reported contributing towards a TFSA, with a median contribution of $6,500. In comparison, fewer than half a million (434,000) tax filers aged 65 and older reported contributions towards an RRSP.
Among working age groups (25 to 64 years), median RRSP and median TFSA contributions evolved in a similar manner, increasing with each age group. This similarity between medians did not appear when grouped by income. Median TFSA contributions in all income groups varied little (ranging from $6,000 to $6,500), while median RRSP contributions varied from $1,060 for contributors with income of less than $20,000 to $6,810 for those with income of $80,000 or more.
Largest user group of First Home Savings Accounts is younger tax filers with higher incomes
In 2023, the first year of the First Home Savings Account (FHSA), 484,320 tax filers reported having made a contribution. The median contribution for these tax filers was the annual maximum of $8,000. Most contributors had an income of over $60,000 (61.4%) and were from 25 to 34 years of age (57.2%).
Note to readers
Data in this release are based on a preliminary version of the T1 Family File (tax filer data), which is based on an early version of the T1 file received by Statistics Canada from the Canada Revenue Agency.
Statistics on changes in amounts between years do not take inflation into account, which was 3.9% in 2023 according to table 18-10-0005-01.
This release provides data on contributions of tax filers to a Tax-Free Savings Account (TFSA), a Registered Retirement Savings Plan (RRSP) and a First Home Savings Account (FHSA). Data on TFSAs and FHSAs are not available for previous years in the data source used for this release.
RRSPs allow individuals or their spouses to make tax-deductible contributions to individual savings and investment accounts. Each tax filer's RRSP limit is based on 18% of the earned income of the previous tax year up to a fixed maximum, less any pension adjustments, plus any unused room carried forward. The fixed maximum in 2023 was $30,780, up from $29,210 in 2022. Unused contribution room can be carried forward and contributions can be made until age 71.
TFSAs are savings accounts that allow individuals to deposit money and earn income tax-free. Unlike RRSPs, TFSAs contributions are not deductible for income tax purposes. The maximum contribution to TFSAs for 2023 was $6,500. Income earned by investments in the TFSA do not affect the TFSA contribution room. Unused contribution room can be carried forward.
FHSAs are savings accounts to allow first-time homebuyers to save towards a home purchase. FHSAs can be opened by Canadian residents aged 18 to 71 years who qualify as a first-time home buyer. Contributions to FHSAs are tax-deductible in most cases, and qualified withdrawals from FHSAs are tax-free. FHSAs have an annual maximum contribution of $8,000 per year, starting the first year the account is opened. Unused contribution room can be carried forwards, up to a life-time maximum contribution limit of $40,000.
The median is the value in the middle of a group of values (i.e., half of people make contributions above this value and half of people make contributions below this value).
The T1 Family File will undergo a redesign starting with the 2024 reference year. The redesign is a statistical best practice that will increase the timeliness of the data, expand population coverage, and enhance precision at lower geographic levels.
However, due to the redesign, the release of the 2024 data, which would have occurred in spring 2026, will be delayed to winter 2026/2027.
Reference
Definitions, data sources and methods: survey number 4106.
Previous release: Registered retirement savings plan contributions, 2022.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).