Large undecided group suggests education and awareness is needed.
TORONTO, April 3 /CNW/ - Two-thirds of Canadians may not benefit from the
raised RRSP contribution age-limit.
According to a recent survey conducted by Decima Research on behalf of
Edward Jones, only 30 per cent of Canadians polled indicate they will likely
delay withdrawing funds to age 71 as a result of changes proposed in last
months budget announcement.
"It is discouraging that so few Canadians plan to use the extra years
available to continue to grow their savings," says Mary Chan, principal,
mutual fund marketing for Edward Jones. "Our suspicion is that many Canadians
don't understand the benefits of this budget announcement."
For example, if someone with a $250,000 portfolio takes advantage of the
two extra years of saving, they would acquire an additional $36,225, assuming
a rate of return of seven per cent.
In his budget on Monday, March 26, federal Finance Minister Jim Flaherty
announced that, effective immediately, the age limit at which Registered
Retirement Savings Plans (RRSPs), Registered Pension Plans (RPPs) and Deferred
Profit Sharing Plans (DPSPs) must be converted either into a RRIF or an
annuity has been increased to 71 from 69.
The survey revealed that self-employed Canadians were the most ready to
delay their withdrawals, with 41 per cent willing to wait to dip into their
retirement nest egg compared to 28 per cent of company employed people.
"Self-employed people don't have formal company pensions so they may have
stronger concerns about retirement income. They may also lack a succession
strategy and may plan to work much longer than those Canadians who work for
large established firms," says Chan.
Respondents in BC are the group most likely to wait to withdraw funds at
39 per cent, while those in Alberta and Quebec are the least likely to at 23
per cent each. Only a quarter of those in Atlantic Canada plan to delay, while
just over one-third of Canadians in Ontario, Manitoba and Saskatchewan will
"With people retiring later and living longer, seniors should not have to
withdraw funds if they don't need to. With the announced federal changes these
folks have an opportunity to let their money grow in a tax-sheltered account,"
About Edward Jones
Edward Jones is a full-service investment dealer with one of the largest
branch networks in Canada. It is a member of the Investment Dealers
Association of Canada and the Canadian Investor Protection Fund, and a
participating organization of the Toronto Stock Exchange. Including its
affiliates, Edward Jones serves more than 6 million individual investors in
Canada, the U.S. and the United Kingdom from more than 9,000 locations.
The Canadian survey results are based on a Decima Research national phone
survey with a representative sample of 1,008 aged 18 and older between
March 22nd and 25th. A sample of this size will provide results that can
be considered accurate for the population overall to within plus or minus
3.1 per cent.
For further information:
For further information: Jessica Davidson, (416) 969-2735; Trish Tervit,