SOURCE: Scotiabank

Scotiabank

January 06, 2014 06:30 ET

As RSP Deadline Looms, Fewer Canadians Plan to Contribute: Scotiabank Study

Scotiabank Offers Tips on How to Find the Money and Start Investing Today

TORONTO, ON--(Marketwired - January 06, 2014) - With the RSP deadline just eight weeks away, Scotiabank's Annual Investment Poll found that 3 in 10 (31%) Canadians plan to contribute to their RSP this year, a decrease from 39% in both 2012 and 2011. Three-quarters of Canadians (74%) who hold RSPs, and have thought about contributing more, cite lack of affordability as the top reason for not contributing more often (84% in 2012).

The study also found that among Canadians who hold an RSP, 40% have withdrawn funds from their RSP, up 4% from 2012 (36%). Again this year, the top reason for taking money out of RSPs is to take advantage of the Home Buyers' Plan to buy/build a first home (16% vs. 15% in 2012), followed by covering day-to-day living expenses (8% vs. 5% in 2012) and paying down debt (8% vs. 6% in 2012).

"With the new year underway and the RSP contribution deadline less than two months away, we want to encourage Canadians to meet with a financial advisor," says Mike Henry, Senior Vice President of Retail Payments, Deposits and Lending at Scotiabank. "RSPs continue to be an important and tax-effective way to maximize retirement savings. If affordability is an issue, a financial advisor can help identify ways to make that all-important contribution, big or small, as well as develop a financial plan to help achieve retirement goals."

REGIONAL BREAKOUTS
Note: Responses less than 2% not shown.

PLAN TO CONTRIBUTE TO RSP FOR 2013 TAX YEAR
   Total  Atlantic  Quebec  Ontario  Man/Sask  Alberta  BC
No  55%
(49% in 2012)
 54%  50%  55%  55%  50%  65%
Yes  31%
(39% in 2012)
 31%  35%  31%  33%  33%  20%
Don't know  14%
(12% in 2012)
 15%  14%  14%  12%  16%  16%
                             
 
RSP CONTRIBUTION BARRIERS
   Total  Atlantic  Quebec  Ontario  Man/Sask  Alberta  BC
Lack of money / cannot afford it / have expenses / debts  74%
(84% in 2012)
 80%  88%  64%  81%  76%  75%
I contribute enough / regularly / near the contribution limit  6%
(1% in 2012)
 3%  -  10%  -  21%  -
                             
 
HAVE YOU TAKEN MONEY OUT OF YOUR RSP?
   Total  Atlantic  Quebec  Ontario  Man/Sask  Alberta  BC
No  55%
(58% in 2012)
 55%  51%  54%  66%  55%  56%
Yes (Net)  40%
(36% in 2012)
 37%  41%  41%  31%  38%  42%
  To buy / build / get mortgage on first home (Home Buyers' Plan)  16%
(15% in 2012)
 19%  19%  15%  12%  12%  14%
  For day-to-day living expenses  8%
(5% in 2012)
 1%  5%  10%  6%  10%  12%
  To pay down debt  8%
(6% in 2012)
 11%  6%  7%  6%  6%  13%
  For home renovations / improvements  5%
(3% in 2012)
 -  -  7%  4%  12%  6%
                             

RSP Contribution Tips:

  • Talk to your financial advisor to make a plan to find out what works best for you for both long and short-term financial goals.
  • Set-up pre-authorized contributions, such as Scotiabank's Pay Yourself First™ plan, that let you make regular and automatic contributions from your bank account directly into your RSP. Start with a small amount and adjust it depending on your financial situation.
  • Spousal RSPs can be an effective tool in planning for retirement, giving you the ability to contribute to your spouse's RSP, realize income splitting opportunities and potentially reduce your family's overall tax burden.
  • Consider borrowing to top up any unused contribution room and maximize your RSP, as the contribution generates a tax refund that can be used to pay off the loan. The Scotia RSP Catch-Up™ Line of Credit, for example, is an opportunity to maximize both your current and previous years' contributions.
  • Take advantage of online tools to help you get started with your investment planning. Scotiabank's Investment Centre can help you find out where you are in planning for retirement.

About the polling data
This study was conducted online for the third consecutive year using Harris/Decima's online panel. A total of 1,029 completed surveys were collected from a random sample of panel members across Canada. The study was conducted from November 12, 2013 to November 27, 2013.

About Scotiabank
Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 83,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $744 billion (as at October 31, 2013), Scotiabank trades on the Toronto (TSX: BNS) and New York Exchanges (NYSE: BNS). Scotiabank distributes the Bank's media releases using Marketwired. For more information please visit www.scotiabank.com.

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