Canadians to Contribute More to Their RRSP in 2011

According to a survey from BMO Financial, last year, Canadians contributed an average of $4,700 to their RRSPs.

Thirty-seven percent of Canadians have made or are planning on making a contribution to their and/or their spouse’s RRSP before the February 29, 2012 deadline. Of those who are not making a contribution this year, or are contributing less than last year, 38% said they have other expenses, while 20% said they do not have enough money to match or exceed last year’s contribution.

Overall, 61% of Canadians have an RRSP; however, many younger Canadians (18-34 years old) have not opened an RRSP yet, with 62% stating they do not have one in place.

Seventy-one percent of Canadians are concerned about the performance of their RRSP, given the current state of the economy and the volatility of the financial markets. More than one-third (36%) are not confident in their ability to save for retirement, compared to half that amount last year (18%). Forty-two percent of respondents are less optimistic about the financial markets this year compared to last year; this sentiment has doubled since last year (21%).

“The volatility we have experienced in the financial markets over the past year has increased concern among Canadians about their ability to save for retirement,” said Caroline Dabu, vice president, retirement and financial planning, BMO Financial Group. “The current financial climate has made saving more of a priority for Canadians than ever before. It’s encouraging that the vast majority of Canadians who will be contributing to an RRSP will be contributing the same amount or more than last year. However, given the market uncertainty over the last several months, it’s critical that Canadians have a financial plan that includes a retirement saving strategy.”

The online survey was conducted by Leger Marketing from November 21 to November 24, 2011, with a sample of 1,520 Canadians, 18 years of age or older.