The young and the RRSP-less - Fewer young Canadians saving
for retirement: RBC Poll
TORONTO, January 19, 2011 — The number of Canadians
aged 18 to 34 who have RRSPs has dropped to 39 per cent -
the lowest level in almost a decade - and fully 45 per cent
have not started saving for retirement yet, according to the
21st Annual RBC RRSP Poll.
Overall, retirement savings ranked seventh as a financial
priority among younger Canadians (26 per cent). The RBC poll
found that this age group is more focused on other financial
goals such as regular payments to reduce or eliminate debt
(56 per cent), saving for a rainy day (45 per cent) and homeownership
(44 per cent).
The declining number of younger Canadians with RRSPs confirms
a downward trend identified in last year's RBC
RRSP Poll and discussed in an RBC
Economics report issued in January 2010.
"We're seeing other financial priorities become increasingly
top of mind for younger Canadians who may not realize they
are missing out on one of Canada's best income tax savings
vehicles, as well as the potential to grow their investments
more quickly," said Lee Anne Davies, head, Retirement
Strategy, RBC. "Retirement may seem far off in the future
and we understand that paying off debt, purchasing your first
home or raising young families presents competing financial
needs, but building a secure future can and should be part
of any plan to meet those needs."
The RBC poll also found that, despite ranking homeownership
as third on their financial priorities list, younger Canadians
may be under-utilizing the RRSP benefits available to first-time
homebuyers. A federal government program allows for tax-free
RRSP withdrawals to help finance the first purchase of a new
home; yet only six per cent of 18 to 34-year-olds withdrew
money from their RRSP to purchase a home in the past year.
"Younger Canadians' relatively low participation in
the government's first-time homebuyer's program may in part
reflect a lack of understanding about what an RRSP can do
for you well ahead of your retirement years," added Davies.
"The start of the year is a very good time to sit down
with your financial planner or visit your bank branch and
find out what your retirement and investment options are and
to make sure you are making the most of the resources available
2010 RRSP Fast Facts - Canadians aged 18 to 34
- The number of Canadians aged 18-34 who have RRSPs dropped
to 39 per cent, which is the lowest number in almost a decade
and a five percentage point drop from 2009.
- The overall number of Canadian adults who have RRSPs jumped
to 61 per cent, up from 54 per cent in 2009.
- Canadian RRSP holders in the 18-34 age group are most
likely to maximize their RRSP contribution (33 per cent)
for the 2010 tax year.
- A quarter of Canadians with RRSPs (24 per cent) plan to
maximize their contribution for 2010.
- Thirty-five per cent of all Canadians make regular weekly
or bi-weekly contributions to their RRSPs with Canadians
aged 18-34 making up almost half (47 per cent) of this group.
- One-in-three RRSP investors (34 per cent) make regular
contributions through a plan, 45 per cent of whom are Canadians
Charts related to the 2010 RBC RRSP Poll are available online
Whether Canadians want RRSP and retirement savings advice
or to borrow with confidence, the RBC Advice Centre (www.rbcadvicecentre.com)
is updated regularly to reflect current trends and answer
the questions that are top of mind. Interactive tools and
calculators provide customized information covering many facets
of personal finance.
These are some of the findings from the RBC 21st Annual RRSP
Poll conducted by Ipsos Reid between October 29 and November
4, 2010. For this survey, a national sample of 1,457 adults
from Ipsos' Canadian online panel were interviewed, of which
184 were 18 to 34-year-olds. The results are based on samples
where quota sampling and weighting are employed to balance
demographics and ensure that the sample's composition reflects
that of the actual population according to Census data. Quota
samples with weighting from the Ipsos online panel provide
results that are intended to approximate a probability sample.
A weighted probability sample of 1,457 Canadian respondents,
with 100 per cent response rate, would have an estimated margin
of error of ±3 per cent, 19 times out of 20. A weighted
probability sample of 184 18 to 34-year-old respondents, with
100 per cent response rate, would have an estimated margin
of error of ±7.2 per cent, 19 times out of 20.
Your Future by Design® is RBC's distinctive approach
to help clients identify, plan, and realize their goals for
retirement. With the guidance of RBC financial planners and
investment and retirement planners, Your Future by Design
helps clients create a blueprint for a successful lifestyle
and financial plan for retirement based on what is truly important
to them in key areas in life, including family, health, home,
lifestyle, work/business, mind and spirit, and legacy. To
find out more about how RBC can help build a blueprint for
the future, visit www.rbc.com/yourfuture
or call 1-866-335-4055.
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Kathy Bevan, RBC, 416-974-2727
Seema Sharma, RBC, 416-974-5606