- Canadians believe they need an average of $1.54 million for retirement
- Roughly two thirds (63%) say rising prices are affecting
their ability to save for retirement
- Annual Registered Retirement Savings Plan (RRSP)
contributions reach record high of $7,447
TORONTO, Feb. 12,
2025 /CNW/ - BMO's 15th annual Retirement
Survey reveals several key insights into how Canadians feel about
their retirement savings. The survey finds over three quarters of
Canadians (76%) are worried they will not have enough money in
retirement because of rising prices. The survey also finds 63 per
cent of Canadians believe rising prices over the past 12 months
have limited their ability to save for retirement. On average,
Canadians surveyed believe they will need just over $1.54 million to retire, down from $1.67 million in 2023.
Amid inflationary concerns, Canadians are contributing more than
ever to their Registered Retirement Savings Plans (RRSP). This
year, average RRSP contributions are on track to reach $7,447 – a 14 per cent increase over last year
($6,512) and above the pandemic
high-water mark set in 2021 ($6,822).
Annual RRSP Savings Hit Record High, according to BMO
Retirement Survey
"Many Canadians continue to show resilience, making saving and
investing in their retirement a top priority," said Brent Joyce, Chief Investment Strategist and
Managing Director, BMO Private Investment Counsel. "For Canadian
investors, one of the best ways to make financial progress and stop
rising prices from eroding retirement savings over the long term is
to have a portfolio designed to mitigate inflationary pressures,
while also taking other factors like investment time horizon and
risk tolerance into account. Investors may also want to consider
speaking with an investment advisor when looking for ways to help
reduce the impact of inflation on their portfolio."
Among the 63 per cent of Canadians who say rising prices are
limiting their ability to save for retirement, the top four ways
they are adjusting their financial planning are:
- Cutting other spending to maintain current retirement savings
levels
- Putting less into retirement savings
- Planning on working longer
- Putting off retirement savings completely
"Inflation is a major concern for Canadians, and the spike in
prices as the economy emerged from the pandemic is a stark reminder
rising prices can affect spending, investment and savings
plans," said Robert Kavcic, Senior Economist, BMO.
"Inflation should always be a major consideration when saving and
investing for retirement and if investors have concerns about how
rising prices may impact their retirement savings, it may help to
seek guidance from a financial professional."
Helpful Retirement Tips
For Canadians thinking about how much money they may need for
retirement and how to maximize their RRSP savings, BMO offers the
following retirement planning tips:
- Start planning early: Outlining retirement objectives and
long-term financial goals can determine the appropriate investing
and savings solutions to incorporate in a retirement plan.
- Practice discipline: Manage spending, review budgets and
include continuous savings plans as an expense. Monitoring spending
with a monthly budget will allow flexibility to suspend or decrease
the continuous savings plan when needed, or increase the amount
when a budget allows for it.
- Contribute securities to an RRSP: RRSP contributions do not
have to be made in cash; securities may be deposited in any
qualified RRSP investment already owned in an RRSP instead of cash.
This is called an "in-kind' contribution or transfer.
- Seek professional advice: A professional advisor has the
resources and expertise to monitor a retirement portfolio regularly
and recommend investing and savings strategies based on financial
circumstances, aversion to risk and long-term financial goals.
For more on RRSP Savings Tips and Strategies, click here.
Study Methodology
This study was conducted by Pollara with an online sample of
1,500 adult Canadians aged 18 years and above. This research
was conducted from November 8th to 18th,
2024. While margin of error cannot be calculated on a
non-probability sample, for comparison purposes, a probability
sample of 1500 respondents would have a margin of error of ±2.5%,
19 times out of 20.
Disclaimer
This message is for information purposes. The information
contained herein is not, and should not be construed as,
investment, tax or legal advice to any party. Investments should be
evaluated relative to the individual's investment objectives, risk
tolerance and professional advice should be obtained with respect
to any circumstance.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by
assets, with total assets of $1.41 trillion as of October 31, 2024.
Serving customers for 200 years and counting, BMO is a diverse team
of highly engaged employees providing a broad range of personal and
commercial banking, wealth management, global markets and
investment banking products and services to 13 million customers
across Canada, the United States,
and in select markets globally. Driven by a single purpose, to
Boldly Grow the Good in business and life, BMO is committed
to driving positive change in the world, and making progress for a
thriving economy, sustainable future, and inclusive
society.
SOURCE BMO Financial Group
