retirement-meeting-women

Six-in-ten Canadian adults (59%) now own RRSPs, after dipping to 55% in 2012, and how much they’re contributing is also going up, shows an RBC poll.

Average contribution amounts for 2013 are rising to average of $4,653, up about $500 compared to last year.

The poll indicates that younger Canadian adults in particular—those aged 18 to 34—are showing increased attention to RRSPs. Half of this age group now own RRSPs—the highest number in the past six years and a full 10% higher than 2012—and their planned RRSP contribution amount has jumped up by 39% to an average of $4,329 compared to $3,104 last year.

While three-quarters of those with RRSPs indicate they won’t be making the maximum allowable contribution this year, this is not necessarily a cause for concern, according to Richa Hingorani, senior manager, financial planning support, RBC financial planning.

“Maxing out your contribution at the start of the year is great if you can afford it, but for most Canadians regular contributions throughout the year is a more realistic and effective approach,” advises Hingorani.

The survey also finds 34% of RRSP holders make regular contributions. Of these, 61% contribute weekly, biweekly or monthly while 25% make one-time contributions and 10% contribute whenever they have some money.

Further, 72% of RRSP holders report they have unused contribution room. Of these, 78% don’t plan to use up all of their contribution room before they retire. Of those who believe they’ll have unused space, 59% aren’t worried about unused contribution room impacting their ability to retire when they want to.

Most (81%) aren’t planning to change the investment mix within their RRSP.

The survey also reveals the top three investments for all RRSP holders are mutual funds (43%), savings accounts (22%) and GICs or term deposits (20%).

Own RRSPs 2013 2012 2011 2010 2009 2008
Ages 18-34 50% 40% 43% 39% 44% 49%
Ages 35-54 68% 58% 67% 70% 57% 64%
Ages 55-69 63% 64% 69% 70% 63% 71%

Read: Almost 90% to rely on CPP

Planned contributions 2013 2012 2011
Ages 18-34 $4,329 $3,104 $3,191
Ages 35-54 $4,616 $3,980 $5,070
Ages 55+ $5,147 $5,001 $5,612

Read: Email Your Clients: Set up a successful retirement

Contributing maximum amount 2013 2012 2011
Canadians 18-34 26% 32% 16%
Canadians 35-54 20% 26% 25%
Canadians 55+ 25% 24% 29%

Read: Preventing POA abuses

Contribution frequency 2013 2012 2011
Regular weekly, bi- weekly or monthly 61% 60% 58%
One-time 25% 32% 29%
Whenever possible 10% 7% 11%

Originally published on Advisor.ca

Add a comment

You must be logged in to comment.

Register on Advisor.ca