Canadians Young and Old Want Financial Independence in Retirement: RBC Poll
Generation gap still evident in attitudes toward planning, RRSPs
TORONTO, February 7, 2012 Decades may separate Canada's younger generation from Boomers, but some of the attitudes of both age groups toward retirement and balancing financial priorities are strikingly similar, according to RBC's 22nd Annual RRSP Poll.
The vast majority of Canadians aged 18-34 and 55-69 say if they were to outlive their savings in retirement, the idea that their families would step in to take care of them would not be very appealing (82 per cent and 91 per cent, respectively). Similarly, a majority in each age group (78 per cent and 72 per cent) worry about balancing saving for immediate priorities with putting money aside for the longer term or retirement.
Where a gap still exists between these two generations is in financial planning:
- Six-in-ten younger Canadians do not have a financial plan, compared to nearly the same number of older Canadians who do have such a plan (59 per cent).
- Of both age groups who do have a plan, 40 per cent of younger Canadians say they have a plan "in my head", compared to 21 per cent of Boomers.
- More than half (52 per cent) of Boomers report they have their plan on paper, while just over one-quarter (28 per cent) of younger Canadians have a written plan.
"We always advise our clients to have a written plan, as this allows them to map out their progress and then take action," advised Jason Round, head of Financial Planning Support, RBC Financial Planning. "If you have a written plan, you also can share it with a financial planner or advisor and revise it as your goals change."
As the annual RRSP contribution deadline approaches, making plans for the future is more top of mind for both younger and older Canadians, but those aged 18-34 still trail Boomers in RRSP ownership and contribution rates. While 43 per cent of younger Canadians now hold RRSPs, this number still lags behind the 69 per cent of Boomers with RRSPs. Also, only 16 per cent of the younger RRSP holders are planning to maximize their RRSP contributions by this year's February 29, 2012 deadline; that percentage almost doubles (31 per cent) for older Canadians.
"We know it's difficult for younger Canadians to think about a time when they will stop working and they'll be looking to their RRSPs for income," noted Round. "Retirement seems like a very remote concept when you're just beginning your career, buying a home or starting a family. What both younger and older Canadians can visualize, however, is a future they hope to enjoy on their own terms. Building up an RRSP now - even with very small contributions - can help ensure that future."
About the 22nd Annual RBC RRSP Poll
This survey was conducted by Ipsos Reid between October 24 and November 15, 2011 via a random sample of 1,224 adults in the general population (aged 18 and over). 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 1,224 Canadian respondents, with 100 per cent response rate, would have an estimated margin of error of ±3 per cent, 19 times out of 20.
About RBC's financial planning advice, resources and interactive tools
The RBC Advice Centre offers free online advice, resources and tools regarding RRSPs - including the RSP-Matic Savings Calculator and updates on the federal government's RRSP First Time Home Buyers' Plan. Whether Canadians want to save and invest, buy their first home, get more from their day to day banking, protect what's important, or take care of their businesses, the RBC Advice Centre can help answer their questions. Interactive tools and calculators provide customized information covering many facets of personal finance. With the guidance of RBC advisors who are available to chat live, Canadians have access to free, no-obligation professional advice about RBC products and services and personalized one-on-one service. Further information is available at rbcadvicecentre.com. In addition, RBC's myFinanceTracker, a comprehensive online financial management tool, offers all personal RBC online banking clients the ability, at no cost, to create a set budget and track their spending habits and to access H&R Block tax-related apps in the new myTax Centre, to help manage and plan their taxes.
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