More than one-third of Canadians won’t contribute to RRSPs: poll

Many Canadians aren’t taking full advantage of RRSPs.

So says a study from BMO Financial Group, which finds that 36% of Canadians polled don’t plan to contribute to RRSPs at all, while 17% say they’re undecided.

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Of those not making contributions, 40% say they don’t have enough money, while 23% cite other expenses and 8% say they have other investment options.

A cash crunch was also a problem for some in last year’s poll, which found Canadians had withdrawn funds from their RRSPs (before age 71) for reasons beyond purchasing a home: some had to pay for living expenses, debt and emergencies.

For this year, the average amount already contributed to RRSPs has decreased by $472 ($4,616 versus $5,088 last year).

On the plus side, the percentage of Canadians already contributing to RRSPs is holding steady, at 47% this year compared to 46% last year. These respondents say they’re motivated to contribute because of the tax refund (44%), the desire to have enough to get by in retirement (42%), and the aim to achieve an ideal retirement lifestyle (38%).

About the study: BMO’s RRSP survey was conducted by Pollara Strategic Insights via an online survey between Dec. 21 and 28, 2017, with an online sample of 1,500 adult Canadians. The margin of error for a probability sample size of 1,500 is ± 2.5% 19 times out of 20.

Also read:

Are RRSPs better for business owners?

Registered plans and lifetime benefit trusts

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.