A recent poll suggest that young Canadians are shifting their top financial priorities to include retirement savings.
The 22nd annual RBC RRSP poll finds that 43% of Canadians between the ages of 18 and 34 now hold RRSPs. This represents a shift from last year, when the number of younger Canadians holding RRSPs dropped to its lowest point in almost a decade (39%).
In addition, retirement savings has moved up to fourth place on the list of financial priorities for this age group, compared to its seventh place position last year.
What has slipped significantly for the 2011 tax year is the percentage of younger Canadians who plan to contribute the maximum to their RRSPs. In the 2010 tax year, young Canadians were the most likely age-group to maximize their RRSP contribution (33%); for the 2011 tax year, they are the least likely to do so at 16% (compared to 25% of all Canadians).
“Younger Canadians have any number of competing ‘here and now’ financial needs, in addition to trying to save for their future goals,” says Jason Round, head, Financial Planning Support, RBC Financial Planning.
He adds that young people should be aware that the tax-sheltering benefits of RRSPs can help them buy their first home, also reduce their taxable income.
The poll indicates that financial priorities are shifting among younger Canadians. Compared to 2010, more young Canadians are focusing on home ownership (49% compared to 44%) and retirement savings (35% compared to 26%). A lower priority is being placed on regular payments to reduce or eliminate debt (48% compared to 56%) and general savings for a rainy day (39% compared to 45%).
The survey was conducted by Ipsos Reid between October 24 and November 15, 2011 via interviews of 4,135 Canadian adults, including a random sample of 1,224 adults in the general population (aged 18 and over) and 2,911 Boomers aged 50-69 with household financial assets of $100,000 or more.