Originally from our sister publication, Advisor.ca.
The RRSP deadline has come and gone, and here are the results: Only four in ten Canadians made the RRSP contribution for 2011, according to BMO’s annual Post-RRSP Deadline Study.
The online study, which polled 1,500 Canadians, found barely 38% of Canadians contributed or planned to contribute before the deadline.
Incidentally, thanks in part to ongoing market volatility, the participation rate remained largely unchanged from the previous two years (39% last year and 38% two years ago).
The same goes for the total amount Canadians socked away in their RRSPs. The survey found Canadians contributed an average of $4,670 to their RRSPs this year, compared to $4,538 last year.
“It’s very encouraging that, despite the instability we’ve seen in the markets over the last several months, almost 40% of Canadians made saving for retirement a priority by making a contribution to their RRSP this year,” said Tina Di Vito, head of the BMO Retirement Institute. “Regardless of how the markets are doing, it’s critical for Canadians to take ownership of their retirement and save through vehicles such as RRSPs and TFSAs on an ongoing basis.”
Other key findings from the study revealed that men (41%) were more likely to have contributed to an RRSP than women (34%) this year. Alberta, Saskatchewan and Manitoba had the highest proportion of those who contributed to an RRSP in the country (42%), while British Columbians contributed the highest average amount in the country ($6,703).
Mutual funds were the investment of choice this RRSP season with 59% investing in them, followed by GICs (25%), equities (22%), bonds (12%) and ETFs (6%).
A variety of reasons prevented Canadians from making an RRSP contribution this year. The biggest reason, cited by 61% of those polled, was lack of funds, followed by already having enough money for retirement (14%), lack of confidence in the economy (9%). Another 4% did not think it was important to make a contribution.
“Many Canadians are financially stretched and saving for retirement often gets pushed down on the list of financial priorities,” said Di Vito. “However, saving for retirement doesn’t have to happen all at once. The key is to make regular contributions to your RRSP, regardless of the amount. You’ll be surprised how quickly your nest egg will grow over time.”