Canadians are relying on their RRSPs more than ever, according to a recent report from BMO.
The latest BMO RRSP study, released on Thursday, found that 69% of Canadians now hold an RRSP account — up from 60% last year.
The average amount held in RRSP accounts increased as well, hitting $111,922 in 2019, up by almost $10,000 from 2018. In Atlantic Canada, Quebec and Alberta, the average amount increased by 22% year-over-year. In Ontario and British Columbia, holdings were up 6%.
Stock markets had a healthy year in 2019, with the S&P/TSX composite index rising nearly 21%, the Dow Jones Industrial index rising about 22% and the S&P 500 rising about 29%.
Nonetheless, Canadians also plan to invest more into their RRSPs, with the planned amount rising by 55%.
Despite the increased investment, one quarter (25%) of respondents said they don’t know when they will retire, with 10% thinking they will never be able to retire at all.
Only half of Canadians said they would be debt-free by the time they retire, and 59% of respondents were unable to estimate how much money they will need to retire comfortably. Those who could estimate said they would need between $1 million and $1.5 million, with millennials believing they will need about $1.7 million.
“It’s encouraging to see Canadians across the country emphasizing long-term investing and boosting their planned contributions,” said Robert Armstrong, director, multi-asset solutions, BMO Global Asset Management, in a release. “The financial equation for retirement is changing, and Canadians need to consider many variables when determining how much they need to fund the next chapter of their lives.”
The survey was conducted by Pollara Strategic Insights, surveying 1,500 adult Canadians between Nov. 26 and Dec. 3, 2019.