Canadians say they’ll stay the course on RRSP

While many Canadians may be jittery about equity markets these days, they still see the value in socking away cash for their retirement, according to the annual Investors Group survey of investors’ RRSP intentions.

Three quarters of adults have an RRSP, according to the survey, and 83% of those who plan to make an RRSP contribution said they would deposit at least as much as they did last year, up from 79% last year.

“Canadians have used RRSPs as the cornerstone of their personal investment and savings plan for many years and it is encouraging to see this level of continued commitment,” said Jack Courtney, assistant vice-president, advanced financial planning, Investors Group. “Keeping your long term objectives in mind is very important when making investing decisions and a personal financial plan is a definite asset in that regard.”

Canadians who have a financial plan are more likely to already have or intend to establish an RRSP (88%), compared with those who do not have a financial plan (64%). They are also more likely to already have or plan to start a TFSA (78% compared to 58%).

Baby boomers remain the most likely to already have, or plan to open, an RRSP (83%), compared to 54% of Generation Y. Forty-five percent of younger Canadians, aged 18 to 29, already or plan to open an RRSP.

These younger investors were more likely to say they would increase their contribution (48%) while only 27% or boomers said they would do so. This makes sense given that incomes can increase dramatically within the younger cohort, while boomers are more likely to already be contributing as much as they are comfortable with.

One of the biggest hurdles in opening an RRSP for the younger group is that they don’t have any money left over after paying their bills (64%), but another 22% say they do have the money, but are planning to pay down debt before investing.

“Getting an early start in the game is crucial for long-term success,” Courtney said. “It appears that many young Canadians recognize this and are trying to find ways to invest regularly while meeting life’s ongoing financial obligations. While finding the money to invest can be difficult, starting small and establishing good saving and investing habits early in life can lead to big returns.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.