Only 1-in-3 are planning to contribute to their RRSPs for 2009

One-in-three Canadians have not started saving for retirement yet, compared to one-in-four in 2008, according to a new RRSP poll released by Royal Bank of Canada.

The study also found only 36% say they are planning or have planned for retirement, down from 42% in 2008. The decline is most noticeable among those aged 55 and over, with only 53% doing any retirement planning compared to 67% in 2008.

Just 35% of survey respondents have contributed to or plan to contribute to an RRSP for the 2009 tax year. This is the lowest percentage of contributors since 1996’s 34%. Among those with an RRSP who are not contributing this year or who are reducing their contribution, 54% say it is because of current economic conditions.

“With the recent economic uncertainty, we understand it may have been difficult for many Canadians to focus on planning for retirement,” says Lee Anne Davies, head, retirement strategies, RBC. “It’s not easy juggling many financial priorities especially during challenging economic times.”

Respondents are divided over whether Canadians were better prepared for retirement 20 years ago compared to today, with 49% saying that Canadians were better prepared 20 years ago versus 46% who think we are better prepared today.

“Life may have been simpler 20 years ago, and with that, so was planning for retirement,” adds Davies. “Today, retirement is more complex with many factors to consider, such as boomers faced with financially supporting adult children, family structure changes and elderly parents living longer.”

Among the reports other findings:

• Many Canadians are waiting until the last minute to contribute to their RRSPs, with 35% who plan to make a one-time RRSP contribution expecting to do so just before the March 1, 2010 deadline.

• Only 24% of respondents plan to maximize their RRSP contribution for the 2009 tax year.

• Among Canadians who have an RRSP, 76% plan to contribute at least as much as what they contributed in 2008.

• Only 31% of RRSP investors make regular
contributions through a plan.

• Although mutual funds remain the top planned RRSP investment choice (42%) for the 2009 tax year, they have been declining since 2006 (55%). Younger Canadians (aged 18-34) are more likely to favour savings accounts (29%) and cash (23%).

These are some of the findings the RBC 20th Annual RBC Poll conducted by Ipsos Reid between October 21 and November 2, 2009. For this survey, a national sample of 1,457 adults from Ipsos’ Canadian online panel was interviewed online.

IE