Economic concerns erode RRSP plans: poll

The past year of market volatility has had a small impact on Canadians’ willingness to invest for retirement, according to Investors Group’s eighth annual RRSP Investment Intentions poll.

Among respondents who plan to contribute to their RRSPs, 68% said they would continue to invest the same amount or more than last year.

When it comes to the investments they plan to make, Canadians appear to be a little more conservative this year, with 44% saying they would choose “safe” investments. That’s up only slightly from 40% in 2008, but more than double the 19% who aimed for safety in 2007.

“Risk and return go hand in hand, but there’s a difference between playing it safe and not playing at all,” says Jack Courtney, assistant vice-president of advanced financial planning with Investors Group. “Too much caution could mean missed opportunities.”

Those nearing retirement were increasingly cautious in their investments, with 28% saying they would take a safer route, compared to 21% last year. Still, 38% said they will make no changes, compared to 46% in 2008.

The economy has many Canadians worried that they will have to delay retirement, with 37% expecting they will have to work longer than anticipated, up from 28% who reported they would have to delay retirement last year.

Not surprisingly, those households where someone has lost their job—16% of respondents—plan to work the latest in life. Fifty-four percent of this group said they would work longer, and 30% said they would continue to work even after they had entered “retirement.”

“Many Canadians may have had their confidence shaken by events of the past year, but investing in the stock market remains an important part of preparing for retirement,” says Courtney. “Making a long-term plan, sticking to it and adjusting when necessary are all essential.”

The survey also found that 24% of respondents had opened a tax-free savings account in 2009, and that among this group, 81% planned to invest the same amount or more in 2010.

(11/10/09)