According to the 19th Annual RBC RRSP Poll, only 8% of Canadians who plan to open a Tax Free Savings Account (TFSA) intend to reduce their RRSP contribution to put money in a TFSA instead.

Thirty per cent of those who have heard of the TFSA still plan to contribute as much money to their RRSP as well as to a TFSA, while 23% plan on moving money from existing non-registered savings into a TFSA.

“While Canadians continue to use RRSPs to save for retirement, the TFSA can supplement these savings while sheltering investment returns from tax,” said Lee Anne Davies, head, advanced retirement strategies, RBC. “The TFSA allows Canadians the flexibility to save and invest for a variety of short-term and long-term financial goals.”

Almost half (44%) of Canadians who plan to open a TFSA, intend to use it as a vehicle for long-term retirement savings. Among those aged 35 to 54, this figure rises to 57% and for those between the ages of 18 and 34, 53% plan to use their TFSA to save for retirement. Two in five Canadians who plan to open a TFSA (40%) cite saving for an emergency as their primary intention while 29% will use it for everyday savings and 25% for a large or special purchase.

“When asked to rank their top three financial priorities, Canadians indicated that regular payments to reduce or eliminate debt (52%), retirement savings (44%) and general savings for a rainy day (39%) were top of mind and also reflect their TFSA plans,” added Davies. “We want to help clients determine their financial priorities and then offer advice and solutions, so clients can create the future they want.”

The study also found that just over half (55%) of Canadians have not heard about the TFSA, including 65% of respondents between the ages of 18 and 34. Among Canadians who are aware of the TFSA, almost half (47%) are planning to open and put money in the account.

The poll was conducted by Ipsos Reid from October 16 to 23. This online survey of 1,272 Canadians was conducted via the Ipsos I-Say Online Panel, Ipsos Reid’s national online panel.

IE