There are more Canadians this year with an RRSP account—67% versus 61% last year, finds a study by BMO. But many are not maxing out their annual contributions.
In fact, just one-third are aware of their annual contribution limit, while 60% rarely or never contribute the maximum amount. Only 13% hit the maximum each and every year. As of 2011, the total unused RRSP contribution amount stood at about $500 billion; the figure is estimated to exceed $1 trillion by 2018.
Read: Are you clients dipping into their RRSPs?
Additional findings include:
- Of those who do not have an RRSP, 49% intend to open one within the next five years;
- 72% expect to contribute the same amount or more to their RRSP than they did last year;
- 74% have already made or plans to make a contribution towards an RRSP before the 2012 deadline, compared to 69% last year;
- Last year’s average contribution amount was $4,670;
- 68% are concerned about the performance of their retirement savings.
Read: TFSA or RRSP, what’s the right choice?
“During times of market volatility, it’s critical Canadians have a financial plan that includes a retirement component and that they review their investments regularly and seek out the assistance of a financial professional if needed,” says Marlena Pospiech, senior manager, BMO Wealth Planning Group, BMO Financial Group.
Regional Breakdown
Total | ATL | QC | ON | MB/SK | AB | BC | |
Percentage who have an RRSP | |||||||
2012 | 67 | 64 | 73 | 65 | 65 | 69 | 65 |
2011 | 61 | 48 | 61 | 63 | 70 | 66 | 51 |
Percentage who plan to make a contribution | |||||||
2012 | 74 | 79 | 66 | 80 | 61 | 78 | 67 |
2011 | 68 | 63 | 64 | 73 | 71 | 68 | 68 |