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BMO Financial Group

January 15, 2015 11:00 ET

BMO's Fifth Annual RRSP Study: Almost Two-Thirds of Canadians Say They Will Contribute to Their RRSP this Year

- Forty-two per cent of Canadians have already contributed to an RRSP, up seven per cent from this time last year and up 12 per cent from two years ago

- The average amount contributed to an RRSP in 2013 was $3,518

- One-third of Canadians who will not contribute to an RRSP this year cite "lack of funds available" as the reason

TORONTO, ONTARIO--(Marketwired - Jan. 15, 2015) - BMO Financial Group today announced the results of its fifth annual national Registered Retirement Savings Plan (RRSP) study, which found that saving for retirement is an important goal for many Canadians' this year. According to the study, nearly two-thirds (64 per cent) will be making an RRSP contribution before the March 2, 2015 deadline.

The study also revealed:

  • Forty-two per cent of Canadians have already contributed to an RRSP (compared to 35 per cent this time last year and 30 per cent this time in 2012).
  • More than one-third (37 per cent) plan to contribute and/or make an additional contribution before the deadline (compared to 43 per cent this time last year and 50 per cent this time in 2012).
  • Almost three-quarters (73 per cent) of Canadians have an RRSP (compared to 64 per cent this time last year and 67 per cent this time in 2012).
  • Of those who have already contributed, the average RRSP contribution to date is $3,738 and among those planning to contribute, the average amount planned is $2,892.
  • Last year's overall average contribution amount was $3,518, down slightly from an average of $3,544 the year before.
  • Nearly three-quarters (74 per cent) of men will be making an RRSP contribution before the March 2, 2015 deadline, compared to 55 per cent of women.

"It's encouraging to see that a majority of Canadians have contributed already or are planning to contribute to their RRSPs for the 2014 tax year - an indication that Canadians are thinking ahead and planning for retirement," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "However, our study also shows that many are leaving their 2014 contribution to the last minute. To avoid scrambling to find the money before the March 2, 2015 deadline, we recommend that Canadians consider setting up a continuous savings plan which will be easier to budget for and allow for automatic and consistent smaller contributions throughout the year. This helps avoid the stress associated with meeting the deadline."

To Contribute or Not - Reasons Why

The study also examined the reasons behind those who are not planning to make a contribution to an RRSP this year:

  • Not having enough money to make a contribution (28 per cent, compared to 37 per cent last year)
  • Having other expenses which take precedence (19 per cent, compared to 33 per cent last year)
  • Other investment options take priority over contributing to an RRSP (10 per cent, compared to 11 per cent last year)

The study also looked at what is driving Canadians to make retirement saving a priority this year. This includes:

  • Having enough to get by in retirement (45 per cent)
  • Receiving a tax refund (45 per cent)
  • Having enough to achieve their ideal retirement lifestyle (44 per cent)
  • Having enough for retirement and to leave an inheritance for their children (21 per cent)

"It's understandable that competing financial demands make it difficult to put money aside for retirement," said Mr. Buttigieg. "Having a financial plan will help you to identify what you need to save for and how much, making it easier to invest for major milestones in life such as retirement, your children's education or a big purchase in the future like a home. Saving for retirement doesn't have to happen all at once. By starting early and contributing small amounts at regular intervals, you'll see the power of compounding and dollar cost averaging benefit your savings over time."

Regional Breakdown:

Region % who will be making an RRSP contribution for 2014 % who have already made a contribution before the 2014 deadline % who expect to contribute to an RRSP before the 2014 deadline % with an RRSP Average $ amount contributed (2013 tax year vs. 2012 tax year)
National 64 42 37 73 3,518/3,544
Atlantic 50 34 35 60 2,785/3,955
Quebec 69 47 39 77 3,444/3,049
Ontario 64 41 37 73 3,811/3,592
Alberta 69 48 36 79 3,270/4,462
B.C. 60 37 37 67 2,926/3,173

For more information on saving for retirement, please visit www.bmo.com/retirement.

Get the latest BMO press releases via Twitter by following @BMOmedia

The survey was conducted by Pollara with an online sample of 1,300 Canadians, including 800 non-retirees aged 18-64 and 500 retirees of any age. The survey was conducted from November 12 to November 17, 2014.

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