TORONTO, ONTARIO--(Marketwire - March 2, 2013) - BMO Financial Group today released the findings of its Fourth Annual Post-RRSP Deadline Study, conducted during the last week of February. The study found that 63 per cent of Canadians have already made or planned to make a contribution to their Registered Retirement Savings Plan (RRSP) before today's deadline. This is an increase over last year, when only 38 per cent contributed or expected to contribute to their RRSP before the deadline.
The BMO study also found that Canadians contributed an average of $3,544 to their RRSPs this year, down from an average of $4,670 last year. So while more Canadians contributed, the average amount contributed was lower.
"It's encouraging to see that the number of Canadians who contributed to an RRSP is up this year," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "People need to remember that planning and saving for retirement should not be limited to the month prior to the annual RRSP deadline. Rather, it should be approached as a year-round activity in order to approach it in a thoughtful and organized manner. After all, your retirement could last up to thirty years, so it's well worth the investment of both time and dollars."
The Psychology of Saving for Retirement
The study also revealed that, when asked what motivated them to make a contribution, more than half (51 per cent) of Canadians feel that saving for retirement is the responsible thing to do. Other motivating factors that encouraged Canadians to make a contribution this year include:
- Thirty-five per cent say it makes them feel good about themselves
- Almost a third (31 per cent) are worried about not having enough money for retirement
- Seventeen per cent had some extra money so thought it made sense to invest it in their RRSP
"Fear should not be one of the main motivating factors to save for retirement, and it doesn't have to be. Putting together a comprehensive financial plan, which includes a retirement component, can go a long way to ensuring you're on the road to retirement success and can greatly reduce your stress levels," noted Mr. Buttigieg. "Think of an RRSP as your own personal pension plan. With that in mind, you will see value in investing in your future by contributing to it on a regular basis."
RRSP Tax Refund - Spend it or Save it?
According to the study, 43 per cent of Canadians who anticipate receiving money back this tax year because of an RRSP contribution plan to save or invest the money, and 36 per cent plan to use the money pay their bills. Other plans for tax refunds include:
- Doing home renovations or buying household items (19 per cent)
- Paying down mortgage (15 per cent)
- Travelling or purchasing leisure items (15 per cent)
For Canadians who haven't contributed yet, there is still time to consider an investment that's right for them. For example, BMO SelectClass® Portfolios* come in four portfolios options designed to align with different risk profiles, so whether an investor is conservative, bold or somewhere in between, there is a portfolio tailored to them. This type of portfolio design can give investors confidence that they are on track to achieving their long-term goals- such as being financially prepared for retirement.
|Percentage of Canadians who have contributed or plan to before the March 1st deadline
|Average amount contributed or planned to contribute before the March 1st deadline
For more information on planning for retirement, please visit www.bmo.com/retirement.
Get the latest BMO press releases via Twitter by following @BMOmedia.
The survey was conducted online by Pollara about a sample of n=1000 Canadians from February 22 to February 25, 2013. The margin of error on the overall sample is +/- 3.1%, 19 times out of 20.
*BMO SelectClass Portfolios are offered by BMO Investments Inc., a financial services firm and separate legal entity from Bank of Montreal. Commissions, trailing 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.
® Registered trademark of Bank of Montreal, used under licence.