More than half of Canadians (63%) made or will make an RRSP contribution by the deadline, finds BMO’s post-RRSP deadline study.
This is a significant increase over last year, when only 38% contributed to their accounts.
It adds they’ve contributed an average of $3,500 to their RRSPs this year, down from an average of $4,600 last year.
“It’s encouraging to see that the number of Canadians who contributed to an RRSP is up this year,” says Chris Buttigieg, senior manager of Wealth Planning Strategy at BMO Financial Group.
He adds, “Planning and saving for retirement shouldn’t be limited to the month prior to the annual RRSP deadline. It should be approached as a year-round activity in order to approach it in a thoughtful and organized manner. After all, your retirement could last up to thirty years, so it’s well worth the investment of both time and dollars.”
Read: Beyond the RRSP deadline
When asked what motivated them to make a contribution, more than half (51%) of Canadians feel saving for retirement is responsible. Others say they do so because of a lack of retirement funds (31%) or because they had extra money to allocate (17%).
“Fear shouldn’t be one of the main motivating factors to save for retirement, and it doesn’t have to be,” says Buttigieg. “[Help clients] think of an RRSP as [a] personal pension plan” that has to be contributed to regularly to fully fund their retirements.
The study also says 43% of respondents anticipate getting money back this tax year due to their RRSP contribution plans. While 36% plan to use the money pay bills, other are set on making home renovations (19%), paying down their mortgages (15%) and travelling (15%).