A robust 79% majority of Canadians who already have money invested in RRSPs plan to invest the same or more this tax year than they did last year, according to new research from Investors Group.

That’s an increase of 11 percentage points from the intentions of last year’s contributors (68%).

“Since first introduced 53 years ago, RRSPs have proven to be a tried and true investment vehicle,” says Jack Courtney, assistant vice president of advanced financial planning at Winnepeg-based Investors Group. “The majority of Canadians are telling us that to know RRSPs, is to love them. This is an important message, especially for those who have not yet considered RRSPs as part of their retirement planning.”

As well, the Tax-Free Savings Account continues to gain popularity as a savings and investment tool for Canadians. Forty-three per cent have opened a TFSA account compared with 24% at this time last year. Among those who have not yet opened a TFSA, 19% plan to open one in 2011.

Advice needed

When Canadians who did not plan to contribute to RRSPs were asked why, 62% said they didn’t have enough money after all their living expenses. While more than half of them reported annual household incomes of less than $40,000, a notable portion (35%) said their household income was between $40,000 and $100,000 a year.

“The survey results indicate that nine out of 10 in the middle income group who say they don’t have the money for an RRSP are not working with a financial advisor.” Courtney adds. “Research shows that Canadians who rely on professional advice to guide their financial decisions are wealthier, more confident and better prepared for the financial implications of life.”

Other reasons Canadians offered for not investing in RRSPs this year included focusing on paying off their mortgage or other loans (17%) preferring to spend their money on things they want now (13%) and a planned contribution to a Tax-Free Savings Account (11%). Only 9% expressed concerns about investing or stock market conditions.

The survey also found that additional incentives are not likely to change the intentions of many of the non-contributors. Financial contributions by employers, better tax incentives, and guaranteed rates of return on their investments would not prompt an RRSP contribution according to four out of ten (39%) of the non-investors.

RRSPs breed confidence about retirement

According to Investors Group research, those who have RRSPs are more than twice as confident that they will have enough money to meet their basic retirement needs than those who do not currently have RRSPs (60% compared to 28%).

Similarly, 31% of people who have RRSPs feel they are able to achieve their dream retirement lifestyle compared with 14% without RRSPs.

RRSPs aside, the majority of all Canadians (65%) currently working with a financial advisor are more confident that they will have enough money saved to meet their basic retirement living expenses. Thirty-five per cent feel they can achieve their dream retirement lifestyle compared to 19% without an advisor.

“The key to achieving your goal is to have a plan tailored to fit you,” says Courtney. “Canadians who focus on their future with a strategy are more likely to get where they want to be.”

This Harris/Decima Poll was conducted online within Canada between October 28 and November 9, among 2,031 adults (aged 18 and over).

IE