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RBC debunks common misconceptions about RRSP
saving and investing
Average Canadian starts saving for retirement
at age 32
TORONTO, February 20, 2013 — With
the Registered Retirement Savings Plan (RRSP) contribution
deadline for the 2012 tax year approaching, RBC provides clarity
regarding RRSP myths and encourages Canadians to start saving
for retirement sooner. According to the 23rd Annual RBC RRSP
Poll, on average, Canadians say they started saving for their
retirement at age 32 and one-quarter of Canadians (26 per
cent) have not started to save for retirement.
"There are common misconceptions around savings and
investing that may be keeping Canadians on the sidelines,"
said Jason Round, head, Financial Planning Support, RBC Financial
Planning. "The first step is getting in the game, it's
important to start no matter the amount you have to save and
the earlier you start the better."
Canadians are getting the message about saving for retirement
through regular contributions. Among those who have RRSPs
and who have contributed or plan to contribute for the 2012
tax year, six-in-10 say they make regular contributions. Regular
contribution plans are the top means of contributing to RRSPs
with four-in-10 (37 per cent) Canadian RRSP holders between
the ages of 18 to 54 doing so.
Round debunks the following misconceptions when it comes
to RRSP saving and investing:
- Myth: Be wary of market volatility and
delay starting up an automatic plan given market downturns.
Reality: Automatic contribution plans help
create a regular savings habit and take the guesswork out
of timing of the market.
- Myth: I need to have a sizable lump sum
to be able to invest.
Reality: Through regular savings and the benefit
of compounding, a little can turn into a lot. Set up manageable
pre-authorized contributions that line up with your pay
day and watch your savings grow.
- Myth: It's easier to catch up on RRSP savings
when you are older and more established.
Reality: While you may be more established
when older, you may also have more financial responsibility
(mortgage, children). Contributing early and regularly allows
you to apply a 'pay yourself first' approach to managing
your finances and the added benefit of compounding.
- Myth: Investing is complicated.
Reality: There is an investment approach for
everyone. It can be as simple or complex as you like; mutual
funds offer professional investment management, portfolio
solutions take care of the asset allocation and do-it-yourself
brokerages offer a range of investment products. A financial
advisor can help you find investment solutions that work
for you.
- Myth: An RRSP only benefits those in the
top tax bracket.
Reality: RRSPs are about more than a tax refund.
They allow you to save for the future on a tax-sheltered
basis and can include a variety of investments. There are
other savings vehicles, like a Tax-Free Savings Account,
that you may consider depending on your own circumstances
and goals for the future.
About RBC's financial planning
advice, resources and interactive tools
The RBC Advice Centre offers free online advice, resources
and tools regarding retirement
and estate planning including RRSPs,
the RSP-Matic®
Savings Calculator and updates on the federal government’s
RRSP First
Time Home Buyers' Plan. 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.
About the 23rd Annual RBC RRSP
Poll
The 23rd Annual RBC RRSP poll was conducted by Ipsos Reid
between October 24 and November 27, 2012 via a random sample
of 1,225 Canadian 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 1,225 Canadian respondents, with 100 per cent response
rate, would have an estimated margin of error of ±3
per cent, 19 times out of 20.
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Media contacts:
Suzanne Willers,
RBC, 416 974-2727
Kate Yurincich,
RBC, 416 974-1031
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