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More than Half of Canadians Not Making an RSP Contribution this Year; One-third Waiting until the Last Minute
According to new BMO/Leger poll:
  • More than half of Canadians not making an RSP contribution this year
  • One third say they made or will make their RSP contribution after February 15th
  • More than one in four say uncertainty in the markets has impacted their investment decision
  • One third are making an RSP contribution to get a tax refund
  • One in four plan to put their tax refund into savings

TORONTO, February 27, 2008

Over half of the 1,500 Canadians surveyed are not planning to add to their Retirement Savings Plan (RSP) for the 2007 contribution period, according to a recent BMO Financial Group/Leger study. This trend is led by respondents aged 55-64 – the group closest to retirement -- with two out of three choosing not to contribute this year.

“The first couple of months in the year can be hard on your wallet with holiday and other household bills needing to be paid. Contributing to an RSP can often fall off the list, especially when left to the last minute,” said Judy Thomson, Director, BMO Retail Investments. “Our message to Canadians this RSP season is: Make this your final last minute RSP contribution and get into the habit of saving for retirement on a regular basis.”

According the survey, one third of Canadians made or will make their RSP contribution after February 15 this year. Last minute contributions are a growing trend with 25,000 BMO customers making RSP contributions on the deadline date last year, up 20 per cent from the previous year.

What:
Stop the stressful cycle of the RSP season by taking a minute to set up a Continuous Savings Plan (CSP). It's a lot easier to come up with a bi-weekly or monthly contribution than one lump sum – especially if you have it automatically taken out of your account. By investing regularly you will also benefit from dollar cost averaging – you will purchase units of your mutual fund at different rates, depending on the daily value as the markets fluctuate. When the value is low, you will purchase more units at a better price to further grow your investment.

But if you are feeling too stretched to make a contribution, there are many options available to make it easier. You could take out an RSP loan or RSP Catch-up loan. Or consider borrowing from yourself. If you're a homeowner, leveraging your mortgage cash account might be a great way to make that contribution while limiting the impact to your monthly cash flow.

Who:
As RSP season draws to a close, BMO Financial Group has local experts available for last minute interviews and wrap-up stories. They can provide investing expertise and tips on a number of topics, including:

  • Last minute investing tips
  • Is borrowing to invest an option for you?
  • How mortgage customers can use the equity in their home to help contribute to their wealth management goals
  • Financial planning strategies for investors of all ages
  • How to determine how much you'll need to save for retirement
  • You've missed the February 29th deadline – now what?

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