(February 15 – 11:00 ET) – A survey conducted in January for Mackenzie Financial found that 56% of Canadians are investing outside of an RRSP.

Investing outside of an RRSP has become increasingly attractive since a new lower capital gains tax was announced last fall, although the survey finds 44% of investors did not know of the change. This was hardly surprising given that 92% were unable to correctly identify the capital gains tax rate.

“Investors with non-registered portfolios have entered into a great investment opportunity without even knowing it,” said Mark Tiffin, executive vice president, Mackenzie Financial Services Inc. “New tax laws provide even more incentive to invest outside of a registered account. Investors should consult their financial advisor who can help them understand how the new rules will beneficially impact their non-registered accounts.”

The survey revealed that 19% of respondents are not investing in RRSPs because they don’t believe that an RRSP provides any additional benefits over and above non-registered investing. Another 20% claim they have already reached their maximum contribution limits for the year.

Half of these non-registered investors indicated they are saving for a rainy day or a special purchase. Meanwhile, 69% of Canadians with non-registered accounts say they will continue to contribute to these non-registered accounts in the next twelve months.

“Although an RRSP may not be the best strategy for all investors, it is still the most efficient way for most Canadians to save for their retirement and is the largest tax break they have at their disposal,” said Tiffin.

“However, for investors who have already contributed the maximum to their RRSP, the lower capital gains tax certainly makes a non-registered account a much more attractive way to build an additional reserve for purchases like a home or cottage.”

The survey found that 38% of respondents had investments in both registered and non-registered accounts, while 15% had registered investment portfolios alone and 18% had investments outside of an RRSP only.

The survey was conducted by Decima Research through telephone interviews with 2,008 Canadians between January 17 to January 23, 2001.
-IE Staff