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Long-Term Parking Makes Sense at the Airport NOT in Your RSP Time to develop a financial plan, move “parked” money, and prepare for that tax refund

WHAT:
Canadians likely ‘parked' millions of dollars in low-return investments again this RSP season in order to make that last minute contribution. Much of those investments will sit idle, earning less than optimum returns, because “parkers” have too many other pressing priorities to deal with, they don't know where to invest or they've simply forgotten about the investments.

It's a costly mistake many Canadians make, despite their best intentions. Making an RSP contribution is a good start towards saving for retirement, but it's not enough. Just because the official RSP season may be over, this doesn't mean Canadians should stop thinking about their investments. In fact, the first thing they should do is visit a financial planner, available at no cost at local bank branches, and develop a financial plan.

With the demise of defined benefit pension plans and life expectancy increasing, Canadians without a long-term, comprehensive financial plan are at risk of not having an adequately-funded retirement.

According to a recent BMO survey, 34 per cent of Canadian baby boomers admit that they do not have a financial plan. More than half of boomers don't have a written financial plan and 21 per cent indicate that their plans are “in their head”. While the majority of boomers polled (70 per cent) have RSPs, close to half consider their RSP to be their financial plan. Alarmingly, when it comes to retirement planning, 22 per cent said they are “hoping for the best”.

It's important for all Canadians to develop a financial plan to help ensure any investments they make are in line with their objectives and goals. This will also help them avoid the long-term parked money scenario.

WHO:
BMO Financial Group has national and local financial planning experts available to offer commentary and advice on:

What is parked money and what to do with it
How to make the most of your RSP contributions and avoid the last minute rush
How to review your portfolio to ensure you appropriately invested your RSP contribution
Developing a financial plan – it's easier than you think
Where to go for free financial advice
How to maximize your tax refund

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