According to this ranking from Natixis Global Retirement Index, Canada is ranked 13th (United States is ranked 19th, if you are asking). The western and northern European countries have swept the ranking mostly due to the higher marks achieved in the Health and Quality of Life sections.
Some metric points may have more influence than others in the ranking consideration which may or may not matter to you.
The income tax rate is calculated by your employer and is deducted at the source. If you contribute to your RRSP (or similar tax-deferred accounts) during the tax year, you end up getting a refund at the end of the year since the tax is deferred to whatever amount you contributed to your RRSP.
For e.g.: Say, you contribute $100 each month to an RRSP account. When the tax season comes around and you file your taxes, you end up getting a tax refund for whatever amount of taxes were applied on that amount = ($1200 x Your Tax Rate).
You are paying too much in taxes to begin with – leaving you with a smaller take-home paycheque. You are lending the government interest-free money for a year! That extra amount that you have paid could have been growing tax-free in your investments and when you consider how compound interest works, you realize how much of your income you are missing out on.
The solution for this is listed below:
Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.