Newspaper article The Canadian Press

Fewer Canadians Have Money to Contribute to Their RRSP This Year: Bank Polls

Newspaper article The Canadian Press

Fewer Canadians Have Money to Contribute to Their RRSP This Year: Bank Polls

Article excerpt

Canadians feel pinch on RRSPs this year

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MONTREAL - Fewer Canadians are planning to put money into a Registered Retirement Saving Plan this year simply because they can't afford it, say surveys by two big banks.

Both Scotiabank (TSX:BNS) and Bank of Montreal (TSX:BMO) say many Canadians have other expenses, such as car payments and paying down debt, that are preventing them from making a contribution.

Scotiabank found that 31 per cent planned to contribute to their RRSP, down from 39 per cent last year. BMO said 43 per cent of those surveyed planned to contribute, down from 50 per cent in 2013.

"The top answer was that they did not have enough money to make a contribution," said BMO's Chris Buttigieg, senior manager of wealth planning strategy.

Mike Henry, a Scotiabank senior vice-president, agreed, saying those surveyed by his bank said "they can't afford it, they've got other expenses or other things they're trying to manage."

Overall, three-quarters of those who have RRSPs told Scotiabank they've thought about contributing more money to their plans, but they just don't have the cash.

As the March 3 deadline approaches, those who are planning to make a contribution will have to think about where they will get the money.

Banks would like their customers to set up automatic withdrawal plans to make sure money is being put aside on a regular basis.

Buttigieg said an annual contribution of $2,000 to an RRSP would mean putting aside $167 a month or less than $6 a day, the price of two lattes at a coffee shop.

"We're encouraging Canadians to make an RRSP contribution of any amount before the deadline," he said.

Canadian's have about $500 billion in unused RRSP contributions and that's expected to increase to $1 trillion by 2018, Buttigieg said.

Many Canadians also don't seem to be taking advantage of a Tax-Free Savings Account, either. …

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