BMO Financial Group

BMO Financial Group

January 05, 2011 06:00 ET

BMO Survey: Canadians Exude Optimism & Confidence This RSP Season

- Almost 80 per cent of Canadians feel the same or better about the markets this year vs. last

- Two-thirds are confident in their ability to save for retirement

- More than 70 per cent hold RSPs-though a significant number don't fully know what investments they hold within them

- Canadians are actively saving for retirement: Close to half have made or will be making an RSP contribution this year

TORONTO, ONTARIO--(Marketwire - Jan. 5, 2011) - BMO Financial Group announced the results of a national survey indicating that, when compared to last year, a sense of optimism and confidence is in the air as Canadians enter Retirement Savings Plan (RSP) season. Tempering this positive news is the fact that significant numbers of RSP holders do not fully know what investments they hold in their retirement portfolios. 

The survey found:

  • The vast majority (79 per cent) of respondents either feel the same or are more optimistic when it comes to the financial markets when compared to last year.
  • Two-thirds (66 per cent) believe they are on the right path when it comes to saving for their retirement.
  • More than two-thirds (72 per cent) of Canadians reported holding an RSP.
  • However, a disturbing 70 per cent are not fully familiar with the mix of investments in their RSP accounts— with only 20 per cent of women and 43 per cent of men reporting being fully familiar with what they hold.

"Canadians are upbeat about the markets and their ability to save for retirement this year," said Tina Di Vito, Head, BMO Retirement Institute. "However, the survey also indicates that there is a real need for Canadians to become more familiar with what they hold within their RSP portfolios in order to balance risk and deal with the inevitable ups and downs of the markets. People should consider a combination of investment vehicles in their RSP, including stocks, mutual funds and guaranteed income vehicles such as GICs."

The survey also found that, with RSP season approaching, almost half of Canadians surveyed (48 per cent) have either already made a contribution or plan to this year. Of this number, 80 per cent have or are planning on contributing the same amount or more than last year; according to Statistics Canada, the median RSP contribution last year was $2,680. Conversely, one-third of Canadians (33 per cent) are not planning to make a contribution this year.

"Securing your retirement is one of the key things that you can do to improve your financial wellbeing," says Ms. Di Vito. "That's why we've made it one of our SmartSteps for Investing. Saving for retirement doesn't have to require a large investment. By getting a clear picture of how much money you may need for retirement you can work towards your goal by contributing smaller amounts on a regular basis and you will see the impact over time."

 Other Key Findings:

  • 59 per cent of survey respondents make RSP contributions throughout the year, as opposed to making one lump sum payment (41 per cent).
  • Four in ten Canadians (40 per cent) agree that borrowing money for an RSP contribution is a good investment strategy. Men are more likely to disagree with this approach (35 per cent) than women (23 per cent).

Regular RSP contributions can go a long way to securing your retirement. Here are some tips to help you build your retirement savings faster:

  • Contribute early and contribute often – Regular contributions will add up in the long run, not only because you are adding to your savings with a set amount, but also because you reap the rewards of compounding interest.

  • Opt for a continuous savings plan – Setting up a continuous plan is an easy way to build your RSP on a consistent basis. RSPs make ideal investment vehicles because they allow your money to grow, tax-sheltered, until you need the money, usually in retirement.

  • Take advantage of tax benefits – The money you contribute to an RSP is deductible from your income tax (within certain limits set by the government). For most people, contributing to an RSP means paying less tax and can often result in a tax refund.

  • Learn about Tax-Deferred Compounding – Tax-Free Compounding refers to the fact that all of your investment earnings (e.g. interest, dividends and capital gains) in your RSP continue to grow without being taxed until the money is withdrawn. This is one of the most significant benefits of an RSP as it allows investors to earn interest on interest. 

  • Use the free help that is available – Speak to a financial professional at any BMO Bank of Montreal branch about how to best secure your retirement or use the online tools available at to learn more about planning your retirement. 

The online survey was conducted by Harris/Decima among 1,002 Canadian adults, between November 15-24, 2010. Results were weighted using the most recent census data to ensure responses were nationally representative.

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