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BMO Financial Group

January 10, 2014 06:00 ET

BMO's Fourth Annual RRSP Study: More Than a Third of Canadians Have Already Contributed to Their RRSP this Year

- Among those who have already contributed, 64 per cent have contributed at least $2,000 and 40 per cent $5,000

- Canadians contributed an average of $3,544 to their RRSPs last year

- Only one-in-three with an RRSP usually contribute the maximum

TORONTO, ONTARIO--(Marketwired - Jan. 10, 2014) - BMO Financial Group today announced the results of its fourth annual national Registered Retirement Savings Plan (RRSP) study, which showed that many Canadians are getting a head start on saving for retirement this year. More than one-third (35 per cent) of Canadians reported that they have already contributed to an RRSP before the March 3rd, 2014 deadline. This is up five per cent from this time last year.

Additionally, according to the study:

  • Sixty-four per cent of those who have already made a contribution have contributed at least $2,000 to their RRSP and 40 per cent have put in at least $5,000.
  • Forty-three per cent of Canadians reported that they will make a contribution to their RRSP by the March 3rd deadline. This is down from the 50 per cent who made a contribution last year.
  • Almost two-thirds (64 per cent) of Canadians have an RRSP, compared to 67 per cent this time last year.
  • One-third reported that they usually contribute the maximum amount to their RRSPs.
  • Last year Canadians contributed an average of $3,544 to their RRSPs.

"It's reassuring to see that many Canadians are being proactive by contributing to their RRSPs well ahead of the deadline. However, according to Statistics Canada the total unused RRSP contribution amount is estimated to exceed $1 trillion by 2018," said Caroline Dabu, Vice President and Head, BMO Wealth Planning Group. "So we encourage everyone to contribute and contribute as early as possible to avoid the difficulties of having to come up with a large lump sum at the last minute."

Ms. Dabu added that using a Continuous Savings Plan (CSP) to make smaller and regular RRSP contributions throughout the year can help alleviate some stress leading up to the deadline. A CSP regularly and automatically withdraws a specific amount of money from an individual's bank account and invests it directly into his or her RRSP. It eases the cost of investing away from one annual deposit and helps increase savings.

RRSP Investing Hurdles

The study also examined the reasons why Canadians are not planning to make a contribution to an RRSP this year. These include:

  • Not having enough money to make a contribution (37 per cent)
  • Having other expenses which take precedence (33 per cent)
  • Prioritizing other investments (11 per cent)

"It can be difficult to balance all of your financial priorities, whether it is paying down your mortgage, saving for your child's education or putting money aside for your retirement," said Ms. Dabu. "A financial plan can help you map out all of your financial commitments to help you prioritize. Also, a financial professional can help you understand your options, offer checkpoints to follow your progress, adjust your plan as your circumstances change and work with you to ensure you stay on track for success."

Regional Breakdown:

Region % who have already made a contribution before the 2013 deadline % who expect to contribute to an RRSP before the 2013 deadline % with an RRSP Average amount contributed last year ($)
National 35 43 64 3,544
Atlantic 30 35 60 3,955
Quebec 29 41 53 3,049
Ontario 41 46 68 3,592
Prairies 41 49 81 3,811
Alberta 34 45 65 4,462
B.C. 31 40 69 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 1,003 Canadians 18 years of age and over, between November 18th and 22nd, 2013.

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