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BMO Financial Group

December 08, 2011 06:00 ET

BMO Annual RRSP Study: More than Half of Quebecers Feeling Good About Their Ability to Save for Retirement

- Almost two-thirds of Quebecers feel confident in their ability to save for their ideal retirement lifestyle

- Forty per cent have or will be making a contribution to an RRSP this year above the national average

- More than half are either more optimistic or feel the same about the financial markets compared to last year

- However, more than 60 per cent are concerned about the performance of their RRSPs

MONTREAL, QUEBEC--(Marketwire - Dec. 8, 2011) - BMO Financial Group today released the results of its Annual Registered Retirement Saving Plan (RRSP) Study, which found that 59 per cent of Quebecers are feeling confident in their ability to save for their ideal retirement lifestyle.

The study, conducted by Leger Marketing, also found that:

  • Forty per cent of Quebecers have made or are planning on making a contribution to an RRSP before the February 29, 2012 deadline.
  • Of those contributing or planning to contribute, almost two-thirds (63 per cent) will be contributing the same amount or more to their RRSP this year compared to last, despite a challenging market environment in 2011.
  • Sixty-one per cent hold RRSPs, the same percentage as Canada as a whole.
  • Fifty-six per cent of people in the province are either more optimistic or feel the same about the financial markets compared to last year - ahead of the national average.
  • That said, nearly two-thirds (63 per cent) of Quebecers are concerned about the performance of their RRSPs, given turbulent financial markets.

"These results show most Quebecers feel they are on the right track with their retirement savings and feel a cautious optimism in the midst of current market volatility," said Jamal Khalil, Regional Sales Manager, Quebec, BMO Bank of Montreal. "To help achieve their ideal retirement lifestyle, it's crucial that Quebecers have a financial plan that includes a retirement savings strategy and ensures their RRSP is well diversified."

Key National Findings:

On a national level, BMO's Annual RRSP Study found that:

  • More than one-third (37 per cent) of Canadians have made or are planning on making an RRSP contribution before the February 29, 2012 deadline.
  • More than two-thirds (69 per cent) of Canadians will be contributing the same amount or more to their RRSP this year versus last, despite a challenging market environment in 2011. Last year, Canadians contributed an average of $4,700 to their RRSPs.
  • Overall, 61 per cent of Canadians have an RRSP; however, many younger Canadians (aged 18-34) have not yet opened an RRSP, with 62 per cent stating that they do not have one in place.
  • Of those who are not making a contribution this year, or are contributing less than last year, 38 per cent said they have other expenses, while 20 per cent said they do not have enough money to match or exceed last year's contribution.

Looking to maximize your retirement savings with minimal impact to your wallet? BMO offers the following advice:

Invest small amounts often - A little really does go a long way with an RRSP. Even small amounts, if invested on a regular basis, can grow significantly, especially when you take into account the effect of compound interest. Consider a pre-authorized payment plan, which takes a small amount out of your bank account every pay day and deposits it into your RRSP.

Don't panic - Although it is tempting to make drastic moves during times of market volatility, resist the temptation to liquidate all of your investments or do anything major. If you have a well-diversified portfolio that is appropriate for your life stage, there is no need to make impulsive moves.

Choose investments that meet your needs - For investors who prefer to take a less active role in investing, target date products such as BMO LifeStage Class Funds allow investors to select the fund that best matches their retirement target date and watch their investments automatically evolve. Each Fund shifts its asset mix on an annual basis so that the percentage of equity investments in the fund decreases as it approaches its target end date. The Funds are intended to provide growth in the early stages and to become progressively more conservative over time.

Borrow to come out ahead - Borrowing money to invest in your RRSP can make sense in some cases, with the resulting tax savings often enough to cover the amount borrowed. Many financial institutions offer low-interest RRSP loans for the current year or to "catch-up" on unused RRSP contribution room. For example, BMO's RRSP Readiline gives you access to a line of credit to maximize this year's RRSP contribution and potentially increase your income tax refund. Speak with a financial professional to determine if this is right for you.

Take advantage of professional help - A financial professional can provide advice on how to grow your investments and assist you in developing a financial plan. To meet with a financial professional, contact a BMO Bank of Montreal branch near you or visit www.bmo.com.

The online survey was conducted by Leger Marketing from November 21 to November 24, 2011, with a sample of 1520 Canadians, 18 years of age or older.

For 2010 results, an online survey conducted by Harris/Decima among 1,002 Canadian adults, between November 15-24, 2010 was used.

BMO LifeStage Class Funds are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal. Commissions, trading commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the mutual fund before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

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