BMO Financial Group

BMO Financial Group

December 08, 2011 06:00 ET

BMO Annual RRSP Study: Prairies Lead Country When It Comes to RRSP Adoption

- Residents in Manitoba and Saskatchewan lead country in RRSP adoption

- More than 40 per cent have or will be making a contribution to an RRSP this year

- Prairie Provinces are the most optimistic when it comes to their outlook for the financial markets

- However, more than three quarters are concerned about the performance of their RRSPs given current financial markets

WINNIPEG, MANITOBA and REGINA, SASKATCHEWAN--(Marketwire - Dec. 8, 2011) - BMO Financial Group today announced the results of its Annual Registered Retirement Savings Plan (RRSP) Study, which found that the Prairie Provinces lead the country in RRSP adoption, with 70 per cent of residents holding an RRSP - nearly 10 per cent above the national average.

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

  • Despite the highest adoption in Canada, forty-one per cent of Prairie residents 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, more than two-thirds (70 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.
  • Almost two-thirds (65 per cent) of those who live in Manitoba and Saskatchewan are confident in their ability to save for their ideal retirement lifestyle.
  • However, despite this optimism, more than three-quarters (77 per cent) who have RRSPs are concerned about their performance given the current state of the economy.

"Residents in Manitoba and Saskatchewan are among the most proactive and confident in the country when it comes to preparing for their retirement," said Chris Dyer, Investment Sales Manager, Manitoba & Saskatchewan, BMO Financial Group. "While these results are promising, there is a concern about how the current financial markets are impacting retirement savings. It's critical to insulate your retirement savings against market fluctuations. Sitting down with a financial professional to discuss your risk tolerance and retirement plans is a good first step in helping to set yourself up for retirement success."

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

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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