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March 07, 2022

Canadians investing in retirement with RRSPs

It seems that Canadians are investing in their retirement a little more than usual.

Now that the RRSP contribution deadline has passed, BMO Bank of Montreal released a study which revealed that 63 per cent of those polled made or had planned on making a contribution to their RRSP before the March 1 deadline.

That's an increase over the previous year when only 38 per cent indicated they were contributing.

So what's the logic behind stashing away your cash now for your golden years ahead?

Well, the study found that feeling a sense of responsibility was one of the biggest motivators. Next to that, making contributions to RRSPs makes people feel good. Another motivator is the fact that many are worried that they just might not have enough money for retirement if they don't start putting it away now.

But even though more Canadians contributed to their RRSPs this year, the average amount they contributed was a tad lower. The study found that this year people contributed $3,544 compared to $4,670 last year.

Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group, says it's encouraging to see that the number of Canadians contributing to RRSPs has increased this year and adds, "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 30 years, so it's well worth the investment of both time and dollars."

According to the study, those receiving a tax refund this year because of their RRSP contribution have some plans on what to do with the money. The majority plan to save or invest the funds while others hope to pay off some bills, undertake some home renovations, pay down their mortgage, travel or buy something special.

By Donna Donaldson, MSN Money

Did you contribute to an RRSP? What are your plans for any RRSP tax refund that you may receive?






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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

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