More Canadians investing in RRSPs, says study
From sea to sea, more Canadians are turning to their RRSPs to invest and now 69 per cent hold an account with an average of $111,922, up from 60 per cent last year, according to the annual BMO RRSP study.
Canadians who have already contributed to their RRSP say they have contributed $6,409 – this is up from $5,247 in 2018. Those who plan to contribute are likely to invest an average of $6,033, which is up 55 per cent from last year ($3,828).
Individuals should monitor their progress
“It's encouraging to see Canadians across the country emphasizing long-term investing and boosting their planned contributions," said Robert Armstrong, director, Multi-Asset Solutions, BMO Global Asset Management. "While Canadians plan to contribute to their RRSPs, we advise individuals to monitor their progress and make regular contributions to avoid stress associated with over-contributing penalties and meeting the RRSP deadline."
The study also suggests that Canadians are moving the bar on when they plan to retire. The report found that on average, Canadians plan to retire by age 62. But one-quarter of Canadians do not know when they will retire and 10 per cent don't think they will ever be able to retire.
Difficult to determine how much money will be needed to retire
At the same time, 59 per cent of Canadians are unable to estimate how much money they would need to retire comfortably. Only half of Canadians are hopeful they will have enough money by their retirement and will be debt-free by the time they retire.
Those surveyed who could estimate a dollar amount say they would need between $1 million and $1.5 million to retire. Not surprisingly, millennials believe they will need more money than that – closer to $1.7 million on average compared to boomers who think they need under a million. And women believe they will need less money to retire compared to men (average of $1.2 million and $1.4 million respectively).