By Daryl Major

Fewer Canadians plan to contribute to retirement savings: BMO survey

Feb 2, 2017 | 8:23 AM

NANAIMO – It’s tax season, the time of year when people start thinking about making RRSP contributions.

A new survey for BMO Financial Group finds that fewer people plan to contribute this year. BMO’s vice president of global asset management Robert Armstrong says some Canadians simply just can’t afford it.

“I think whenever you look at why there’s fewer people contributing, people continue to have issues with not having enough money to make that contribution,” said Armstrong. “There’s other expenses that are taking precedence over the RSP contribution unfortunately.”

But on the other side of the coin, Armstrong says the people that will invest plan to contribute a significant amount more this year.

“It comes back to what was happening last year,” he said. “Last year, stock markets, they were a bit uneasy. There was a bit of uncertainty out there. And all of a sudden with the markets doing a lot better this year, there’s more and more people who are willing to contribute to their RSP.”

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According to the BMO survey, the average amount contributed nationally so far this year is roughly $5,100. That’s about $1,100 more than 2016.

Armstrong says Millennials don’t contribute as much because in many cases they are just starting their careers and have less disposable income. He adds British Colombians are near the top when it comes to making a contribution.

“When you look at number of dollars being contributed to the RSP it’s B.C. and Alberta at the top,” said Armstrong. “Whenever you look to who’s at the bottom, typically it’s the Prairies or the East Coast. And then when you go to the percentage of people who are actually contributing before the deadline, B.C.’s just neck and neck with the national average.”

Armstrong says putting money aware for the future is just the first step. It’s also important to take into consideration how you manage that money once it’s in your RRSP.

daryl.major@jpbg.ca