Nearly two-thirds of Canadians polled say they have made or plan to make a contribution to their RRSP by Friday’s deadline, but with fewer dollars than last year, says a new survey.
The Bank of Montreal found that 63 per cent of Canadians have contributed or will contribute by the deadline, up from 38 per cent last year.
But the average RRSP contribution amount was $3,544, down $1,100 from 2012, said the poll released on Friday.
Chris Buttigieg, senior manager of wealth planning strategy at Bank of Montreal, says Canadians may not be putting away too much into retirement savings because they may already feel squeezed by everyday expenditures and paying down debt.
“That’s probably because they’re trying to juggle financial priorities,” he said.
The survey found that a sense of responsibility was the top motivator for making a contribution this year to a Registered Retirement Savings Plan, with 51 per saying it was the right thing to do.
“I think maybe we’re turning the corner in terms of Canadians’ reliance on pensions, whether they’re employer pensions or government pensions, or perhaps an inheritance or winning a lottery,” Buttigieg said.
“One in two Canadians are realizing they’ve got to take retirement obligations to fund their own retirement squarely on their own shoulders.”
Only about one in three Canadians have an employer pension plan, he added.
The survey found that 43 per cent who anticipated getting money back from an RRSP tax refund plan on saving or investing it.
“It’s human nature to get the refund and spend it or take a vacation,” he said. “(But) They’re taking financial responsibility versus spending it and possibly piling on more debt or more bills.”
Buttigieg recommends that people put aside a monthly amount for their RRSPs to avoid trying to come up with a lump sum.
“It’s a lot easier to save $50 or $100 a month than to try to come up with $1,000 or $2,000 a couple of days before the deadline.”
The survey also found that 36 per cent plan to use the refund to pay their bills; 19 per cent would use it for home renovations or household items; 15 per cent would pay down their mortgage while another 15 per cent would travel or purchase leisure items.
While the deadline is Friday at midnight to make an RRSP contribution, Canadians should be aware when their financial institutions close if they’re going to do it in person.
The online survey was conducted by market research firm Pollara with a sample of 1,000 Canadians from Feb. 22 to Feb. 25.