BMO study finds fewer, but bigger, RRSP contributions

BMO study finds fewer, but bigger, RRSP contributions

BMO study finds fewer, but bigger, RRSP contributions Announcing the results of its yearly RRSP study, BMO Financial Group found a year-on-year drop in the number of Canadians planning to contribute. However, the average amount contributed has risen.

Among this year’s respondents, 46% declared that they have added or have plans to add to their RRSP, a 4% decline from last year. Among those who are not planning to do so, 42% do not have enough money to make a contribution, 28% have other higher-priority expenses to take care of, and 10% have other investments that take priority over their RRSP.

The average amount people plan to contribute this year is $5,088, an increase from last year’s average of $3,984. Canadians who make it a point to add to their RRSP this year cited different reasons, including having enough to get by in retirement (40%), receiving a tax refund (39%), and having enough to support their desired retirement lifestyle (35%).

“Though overall intention to contribute has declined, it's encouraging to see that Canadians who have already contributed for the 2016 tax year have increased their contribution significantly,” said BMO Global Asset Management Vice President Robert Armstrong.

Regionally, Alberta had the highest percentage of respondents who plan to contribute before this year’s RRSP deadline (56%) as well as the highest amount already contributed ($7,333). The highest average planned contribution ($3,897) was observed in BC.
 
Region % who will be
contributing to their
RRSP before this
year's deadline
Average amount Canadians
have already contributed
Average amount Canadians
plan to contribute
National 46 $5,088 $3,304
Atlantic 40 $5,557 $2,439
Quebec 45 $4,521 $3,107
Ontario 46 $4,485 $3,532
Prairies 42 $2,112 $2,589
Alberta 56 $7,333 $3,420
B.C. 44 $6,623 $3,897
 

Related stories:
The RRSP vs. TFSA decision, broken down for millennials
An advisor’s view on creating a retirement plan