BMO 10th Annual RRSP Study: Canadians RRSP Savings on the Rise but Still Struggle to Define Retirement Financial Goals

• 69 per cent of Canadians now hold an RRSP account, compared to 60 per cent last year
• Average amount held in RRSP accounts hits $111,922, up by almost $10,000 compared to 2018
• On average, Canadians plan to retire at 62 – but most are unable to estimate how much money they would need to retire comfortably

TORONTO, Feb. 6, 2020 /CNW/ - According to the annual BMO Registered Retirement Savings Plan (RRSP) study, Canadians are turning to and investing in their RRSPs more than ever – 69 per cent now hold an account at an average amount of $111,922 dollars.

Provincially, the average amounts held in RRSPs in Atlantic Canada, Quebec and Alberta have increased by 22 per cent from $17,000 to $18,000 since last year, and those in Ontario and British Columbia have increased their holdings by 6 per cent from $8,000 to $10,000. 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).

Region	Amount held in RRSPs	Average amount Canadians have already contributed	Average amount Canadians plan to contribute
National	$111,922	$6,409	$6,033
Atlantic	$96,539	$4,013	$1,178
Quebec	$99,659	$4,704	$6,208
Ontario	$128,742	$9,535	$6,228
Prairies	$92,127	$5,369	$3,191
Alberta	$116,426	$4,777	$6,024
British Columbia	$96,665	$6,720	$7,822

"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 overcontributing penalties and meeting the RRSP deadline."

The Retirement Equation

Up against constantly changing variables like life expectancy rates, cost of living, and career paths, Canadians are moving the bar on when they plan to retire. The report revealed:

• On average, Canadians plan to retire by age 62. But 25 per cent of Canadians do not know when they will retire and 10 per cent don't think they will ever be able to retire.
• 59 per cent of Canadians are unable to estimate how much money they would need to retire comfortably. Meanwhile, 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 can estimate a dollar amount say they would need between $1 million and $1.5 million.
• Millennials believe they will need more money to retire than boomers, $1.7 million on average compared to boomers who think they need under a million.
• Women believe they need less money to retire compared to men (average of $1.2 million and $1.4 million respectively).

"The financial equation for retirement is changing, and Canadians need to consider many variables when determining how much they need to fund the next chapter of their lives," said Mr. Armstrong. "It's important Canadians work with a financial advisor to establish an effective plan that prepares them in the lead up to and following retirement. A financial planning expert can help define a personalized strategy and approach to help save and invest for the future."

BMO offers Canadians the following tips to maximize the benefits of a RRSP:

• Start early: Get serious about building retirement assets and take advantage of the tremendous impact that compound interest has on the growth of your RRSP by setting up a Continuous Savings Plan.
• Maximize your contributions: Making small, regular contributions can help you get closer to reaching your limit each year. Contribute only within your available room, because you'll be charged a one per cent penalty every month for over-contributions over $2,000.
• Expertise: A financial planner can take a holistic look at your financial situation and your goals to help you figure out the details of your retirement plan.
• Monitor progress: Keep an eye on how your accounts are doing and check in with your financial planner to see if you should adjust your plan.
• Data-driven retirement: BMO's Retirement Savings Calculator can help you determine how much money you will need for your retirement and assess whether your current financial plan will get you there.

For more information on BMO Registered Retirement Savings Plan Accounts, opening an account, or looking for help, please visit www.bmo.com/rrsp. BMO's Retirement Savings Calculator can be accessed at www.bmo.com/financial-calculators.

The BMO RRSP Survey was conducted by Pollara Strategic Insights via an online survey between November 26 and December 3, 2019, with an online sample of 1,500 adult Canadians. Data has been weighted using the latest census information to be representative in terms of age, gender and region. The margin of error for a probability sample size of 1,500 is ± 2.5% 19 times out of 20.

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $852 billion as of October 31, 2019, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group

Media Contacts: Olivia Fraczkowski, Toronto, [email protected], [phone]; James DeCosimo, Toronto, [email protected], [phone]