With the registered retirement savings plan (RRSP) contribution deadline approaching, most Canadians are starting to feel nervous about their ability to save, suggests a study released by Bank of Montreal.
According to the study, 60% of Canadians feel anxious about finding the money to contribute to RRSPs as the deadline approaches. This anxiety is primarily the result of almost half of survey respondents (49%) planning on making a lump sum contribution before the deadline.
The problem is that with Canadians feeling the holiday credit card hangover, it can be difficult for people to contribute to RRSPs as they had originally planned.
“As the RRSP deadline approaches people are finished shopping for their Christmas presents, they’re getting their first credit card bills, they’re putting a lot of money to what they spent over the holidays,” says Larry Moser, regional sales manager with BMO in Ottawa.
“And some clients find themselves short and say: “Well, I don’t really have money to contribute this year, so maybe I’ll just hold off until next year.”
To help lessen client anxiety about RRSP contributions, says Moser, it’s important that advisors emphasize the importance of starting a regular savings plan through automatic deposits. The problem is that while many people see the value of making an automatic deposit to an RRSP, he says, few take the time to set it up.
Once continuous savings plan was explained to respondents of the study, two-thirds of them were interested in using such a savings plan.
“It’s a logical way to do it,” says Moser, “we’ve just got to get more advisors, more clients to take the time to open up that continuous savings plan, get saving early and then they [the clients] have one less worry about saving for retirement.”
The study results were complied from online interviews of a random sample of 1,000 Canadians 18 years and older. The interviews were conducted between Nov. 23 and 27, 2012.