A recent poll conducted for Royal Bank of Canada finds 59 per cent of Canadian adults survey now own RRSPs, after dipping to 55 per cent in 2012, and the amount they plan to contribute by this year’s March 3 deadline has risen to an average of $4,653, up about $500 compared to last year.
The RBC poll results onflict with the results of a recent Bank of Montreal survey that forecast RRSP contributions would be lower for the 2013 tax year. (See Investment Executive, RRSP contributions down: BMO, January 10, 2014.)
The RBC poll indicates that younger Canadian adults in particular — those aged 18 to 34 — are showing increased attention to RRSPs. 50 per cent of this age group now own RRSPs — the highest number in the past six years and a full 10 per cent higher than 2012 — and their planned RRSP contribution amount has jumped up by 39 per cent to an average of $4,329 compared to $3,104 last year.
While 74 per cent of those with RRSPs indicate they won’t be making the maximum allowable contribution this year, this is not necessarily a cause for concern, according to Richa Hingorani, senior manager, Financial Planning Support, RBC Financial Planning.
“Maxing out your contribution at the startof the yearis great if you can afford it, but for most Canadiansregular contributions throughout the year is a more realistic and effective approach,” advises Hingorani. “By building RRSPs into your cash flow, you can start small and adjust as you go.”
The 24th Annual RBC RRSP poll was conducted by Ipsos Reid between Nov. 6 to 20, 2013 via a random sample of 2,062 Canadian adults (aged 18 and over). The survey’s overall accuracy is plus or minus 2.2%, 19 times out of 20.