By Pascale Hansen

For decades, the RRSP has been marketed as the cornerstone of retirement planning in Canada. Contribute regularly. Defer taxes. Retire comfortably. Simple. Familiar. Incomplete.

The truth is this: RRSPs alone are unlikely to deliver the retirement most Canadians are expecting—especially for business owners, professionals, and high earners.

That doesn’t mean RRSPs are “bad.” It means they’ve been oversold as a complete solution.

Let me unpack why:

1. RRSPs Don’t Eliminate Tax—They Delay It

An RRSP is a tax-deferral vehicle, not a tax-free one.

Every dollar you contribute will eventually be taxed as ordinary income when withdrawn—often at a time when:

• You may also be receiving CPP and OAS

• You may trigger OAS clawbacks

• You may face higher marginal tax rates than expected

Many retirees are surprised to learn they’re paying similar—or even higher—tax rates in retirement than during their working years.

Deferred tax ≠ avoided tax.

2. RRSP Withdrawals Create Cash-Flow Risk in Retirement

RRSPs (and RRIFs) force you into a rigid withdrawal structure:

• Mandatory minimum withdrawals start at age 71

• Withdrawals continue regardless of market conditions

• Poor market timing can permanently damage the longevity of capital

This creates a sequence-of-returns risk—where early market downturns combined with forced withdrawals dramatically reduce long-term outcomes.

Flexibility matters more than most people realize.

3. RRSPs Are Fully Taxable on Death

For single Canadians especially, this is a major blind spot.

When you pass away:

• Your RRSP/RRIF is deemed fully withdrawn

• The entire balance is taxed in your final tax return

• Large accounts can be taxed at 50%+

What many people assume is a legacy becomes a significant windfall for CRA.

If your goal includes wealth transfer, RRSPs are one of the least efficient tools on their own.

4. Contribution Limits Cap the Upside

RRSPs were never designed to fully fund retirement for higher earners.

Annual limits mean:

• You may not be able to shelter enough capital

• Excess savings are pushed into taxable environments

• Growth becomes increasingly inefficient over time

For business owners, this is especially problematic—RRSPs often compete with better corporate strategies.

5. RRSPs Ignore Longevity, Health, and Real-Life Variables

Retirement planning isn’t just math—it’s life.

RRSP-only plans rarely account for:

• Healthcare and long-term care costs

• Longevity risk (living longer than expected)

• Cognitive decline and decision-making capacity

• Estate efficiency and family dynamics

A strong retirement plan isn’t just about how much you have—it’s about how predictable, tax-efficient, and resilient your income is.

So… Are RRSPs Useless? Not at all.

RRSPs work best when they’re:

• Integrated with TFSAs, corporate planning, and insurance strategies

• Actively managed with withdrawal and tax-bracket planning

• Used as one tool, not the entire toolbox

The problem isn’t RRSPs. The problem is relying on them alone.

The Real Question You Should Be Asking

Instead of asking: “Am I maxing my RRSP?” Ask:

“How do I create tax-efficient, flexible, lifetime income—while protecting my estate?”

That question leads to very different strategies.

Ready to Build a Smarter Retirement Plan?

If you’re a business owner or professional who’s done “all the right things” and still feels uncertain about retirement, it’s time for a different conversation.

📩 Book a strategy session to:

• Stress-test your RRSP-based plan

• Identify hidden tax risks

• Design a retirement income strategy that actually matches your lifestyle and legacy goals

Because retirement shouldn’t depend on hope—and it shouldn’t rely on RRSPs alone.people think money strategy begins with spreadsheets, tax planning, or investment choices.
In reality? It starts much deeper—inside your mind.

Your relationship with money was shaped long before you earned your first paycheque. Childhood experiences, family dynamics, culture, trauma, and even off-hand comments from authority figures all form the invisible “financial scripts” that guide your behaviour today. And while these beliefs often operate in the background, they can profoundly impact your wealth outcomes—for better or worse.

Let’s explore how your money psychology works, why it matters, and how you can rewrite the scripts that no longer serve you.

1. Your Money Story Begins in Childhood

Every adult has a “money story,” whether they realize it or not.

Maybe you grew up in a household where:

• Money was always tight and caused stress.

• Talking about money was taboo.

• Success was admired—but wealth was quietly judged.

• Saving was praised, but investing felt risky or even “dangerous.”

These early messages shape your sense of safety, abundance, and worth.

They influence how you:

• Spend

• Save

• Take financial risks

• Talk about money

• Think you deserve to earn

Two people with the same income and the same opportunities can experience vastly different financial outcomes simply because of different internal stories.

2. The Three Most Common Limiting Money Beliefs

If you’re a business owner or high earner, these patterns show up everywhere.

Belief #1: “I must work harder to earn more.”

This belief traps people in overwork and undercharging.
It disconnects earning from value creation.

Belief #2: “I’m not good with money.”

A single comment from a parent or teacher can crystalize into lifelong avoidance—avoiding planning, investing, or understanding taxes.

Belief #3: “Wanting wealth makes me greedy.”

This one silently sabotages success.
Wealth simply amplifies who you are. Generous people become more generous.

If any of these resonate, you’re not alone. They’re deeply human—and absolutely changeable.

3. How Money Beliefs Show Up in Your Daily Decisions

Your subconscious beliefs influence:

✔ Pricing in your business

Undercharging often stems from identity, not numbers.

✔ Investment choices

A scarcity mindset shows up as “playing not to lose” instead of “positioning to grow.”

✔ Cash-flow habits

Impulse spending, hoarding cash, avoiding budgets—these are emotional behaviours, not financial ones.

✔ Long-term planning

People who fear the future often sabotage financial security by not planning for it.

When clients come to me at Zada, their issue is rarely “I need a better strategy.” It’s: “I need to understand why I’m making the decisions I’m making.”

4. Rewriting Your Money Script: A Practical Framework

Step 1: Identify Your Money Narrative

Ask yourself:

• What did I learn about money growing up?

• What emotions come up when I think about wealth?

• What am I afraid might happen if I become truly financially secure?

Awareness is the starting point.

Step 2: Interrupt the Old Pattern

Notice when an automatic reaction shows up:

• Hesitating to invest

• Feeling guilty for raising prices

• Avoiding financial statements

Pause. Question it. Challenge the default.

Step 3: Build a New Identity Story

Instead of:

“I’m bad with money,” shift to:
“I’m learning to make empowered financial choices.”

Instead of:
“Wealth is risky,” try:
“Wealth gives me options, security, and impact.”

Step 4: Align Your Strategy With Your New Story

This is where behavioural psychology meets financial planning.

For example:

• If you fear volatility → build a strategy that balances risk with certainty.

• If you avoid decisions → implement automated systems.

• If you lack confidence → review your plan monthly with an advisor.

Money confidence is built through aligned decisions repeated consistently.

5. Wealth Is 20% Strategy and 80% Behaviour

You could have the perfect tax plan, investment portfolio, and insurance structure—
but if your beliefs run counter to your goals, the plan will not create the outcome.

This is why the most successful entrepreneurs and wealth builders view their psychology as part of their financial strategy.
Your mind is your greatest asset—or your greatest liability.

The goal isn’t to “fix” you.
The goal is to understand yourself so you can make decisions with clarity rather than fear.

Pascale Hansen is the Founder, CEO, and Financial Strategist at Zada.

#PlanBetter #ThinkLongTerm #DesignYourRetirement