BMO Financial Group

BMO Financial Group

December 08, 2011 06:00 ET

BMO Annual RRSP Study: Two-Thirds of Albertans Express Confidence in Saving for Retirement

- Three-in-five Albertans are confident in their ability to save for their ideal retirement lifestyle- making them among the most confident in Canada

- Yet, almost half of those surveyed do not plan to make an RRSP contribution this year

- Seventy-eight per cent of Albertans express concern over the performance of their RRSP, given market volatility and the state of the economy

EDMONTON, ALBERTA--(Marketwire - Dec. 8, 2011) - BMO Financial Group today announced the results of its Annual Registered Retirement Savings Plan (RRSP) Study, which found that almost two-thirds (65 per cent) of Albertans are confident in their ability to save for retirement despite a challenging market environment in 2011. This puts Albertans, and those from the Prairie Provinces, ahead of all other Canadians in having an optimistic outlook on their retirement.

However, the survey, conducted by Leger Marketing, also found that:

  • Forty-eight per cent of Albertans do not plan to make an RRSP contribution this year, compared with 43 per cent nationally.
  • But, of those contributing or planning to contribute, more than two-thirds (68 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.
  • Two-in-five (41 per cent) Albertans are less optimistic about the financial markets this year compared to last year.
  • Seventy-nine per cent of Albertans are concerned about the performance of their RRSP, given the current state of the economy and volatility of the financial markets.

"While it's encouraging to see Albertans confident in their ability to save for retirement, it's a concern that almost half of those surveyed say they will not be making an RRSP contribution this year," said Greg Allen, Divisional Sales Leader, Western Canada, BMO Retail Investments. "It's great to be optimistic, but it's also important to contribute to your retirement savings on a regular basis."

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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