Finance: Fewer Canadians Saving for Retirement


A recent survey of Canadians shows that one in three of us (32 per cent) have not yet begun saving for retirement. Even more worrying, fewer than half of Canadians over the age of 55 have done any retirement planning whatsoever, according to an RBC poll released last week.

The 20th annual RBC RRSP poll says the decline in the number of people saving for retirement this year is down from one-in-four (24 per cent) in 2008, and is the lowest percentage of contributors since 1996 (34 per cent).

The decline might be a direct effect of the recession as 54 per cent say current economic conditions are the reason for not contributing to their RRSP’s.

“The front end of boomers may have hoped that their young adult
children were launched out of the home. But with many of their children
going back to school they still depend on their parents financially.
Leaving them less financial freedom,” said gerontologist Lee Anne Davies, who works with RBC as head of Advanced Retirement Strategies.

“Today, retirement is more complex with many factors to consider, such as boomers faced with financially supporting adult children, family structure changes and elderly parents living longer. All of these can place big demands on your time, your focus and your money, ” added Davies.

Highlights from the RBC poll include:

* Only 36 per cent of Canadians say they are planning or have planned for retirement, down from 42 per cent in 2008

* Fewer of those aged 55 and over (53 per cent) are doing any retirement planning compared to 2008 (67 per cent)

* Just one-in-three Canadians (35 per cent) have contributed to or plan to contribute to an RRSP for the 2009 tax year. This is the lowest percentage of contributors since 1996 (34 per cent).

* Among those with an RRSP who are not contributing this year or who are reducing their contribution, half (54 per cent) say it is because of current economic conditions.

* Forty-nine per cent of respondents think Canadians were better prepared 20 years ago versus 46 per cent who think we are better prepared today.

According to the poll, younger Canadians are not saving for retirement either — at a time when even small contributions mean the most. Women are even less likely to be planning for their future — according to the poll, younger Canadians, those aged 18-34, (45 per cent) and females (37 per cent) are less likely to have started saving for retirement. And, of those who will contribute, it’s a last minute, down to the wire decision One-in-three (35 per cent) who plan to make a one-time RRSP contribution expect to do so just before the March 1st, 2010 deadline.

Only one-in-four Canadians (24 per cent) plan to maximize their RRSP contribution for the 2009 tax year. Canadians aged 18-34 (35 per cent) are most likely to maximize their RRSP contribution. Among Canadians who have an RRSP, 76 per cent plan to contribute at least as much as what they contributed in 2008.

The RBC poll of 1,457 people was conducted between Oct. 21 and Nov. 2.