The ability to withdraw money tax-free at
anytime takes priority over locked-in RRSPs
TORONTO, Feb. 12,
2024 /CNW/ - As the February
29th deadline to contribute to Registered
Retirement Savings Plans (RRSPs) approaches, a new poll from CIBC
has found Canadians are favouring the Tax-Free Saving Account
(TFSA) over other longer horizon investment vehicles, like RRSPs,
and the majority of Canadians (57 per cent) indicate they are more
concerned with meeting their current needs vs. saving for their
future.
Amid higher living costs, recessionary fears and global
uncertainty, Canadian investors are continuing to focus their
strategies for achieving predictable returns versus aggressive
growth (42 per cent).
Most Canadians (67 per cent) have some type of investment
product; however, among investors that own both an RRSP and a TFSA,
45 per cent say they chose to contribute more to their TFSA. The
majority (53 per cent) of those investors also agree that a TFSA
contribution made more sense for their financial situation right
now as it allows them to withdraw their money tax-free at anytime
vs. a locked-in RRSP.
"The preference for short-term liquidity and stable returns
suggests many Canadians are focused on today and less so on
long-term accumulation of wealth or retirement," said Carissa Lucreziano, Vice-President Financial and
Investment Advice, CIBC. "Planning for both short and longer-term
ambitions can help individuals move beyond their immediate needs
and envision how they can live for today, save for the future,
accumulating wealth over time to support their retirement
years."
This is especially important given that Canadians expect to
retire at around age 60 on average – relatively unchanged over the
last several years. Despite this, over half admit to either not
being able to save, or not knowing whether they are saving enough
for retirement. Many (57 per cent) worry they may run out of money
in their retirement years while one third (31 per cent) say they
have delayed their plans because of inflationary pressures and 23
per cent say they haven't started saving for retirement at all.
Additional poll findings include:
- Women and younger Canadians under 35 are not investing to the
same degree as others.
- 29 years old is the mean age Canadians begin saving for
retirement.
- 43 per cent of RRSP holders have already made their
contribution for the 2023 tax year.
- Those that have contributed will put away roughly the same
amount as they did last year.
- The mean stated 2023 contribution amount is $5,642
- 15 per cent of RRSP holders say they haven't contributed
yet but plan to before the deadline.
- One third of RRSP holders are not planning to make
contributions this year.
Disclaimer
These findings are from a Maru Public Opinion online survey
undertaken exclusively for CIBC and fulfilled by the sample and
analyst experts at Maru/Blue. The results were produced from a
random selection of 1,1109 Canadian adults who hold or have managed
investments and are Maru Voice
Canada panelists January
31-February 1, 2024 and then weighted to be representative
of the Canadian adult population. A probability sample of this size
has an estimated margin of error (which measures sampling
variability) of +/- 2.3%, 19 times out of 20.
About CIBC
CIBC is a leading North American financial institution with 14
million personal banking, business, public sector and institutional
clients. Across Personal and Business Banking, Commercial Banking
and Wealth Management, and Capital Markets and Direct Financial
Services businesses, CIBC offers a full range of advice, solutions
and services through its leading digital banking network, and
locations across Canada, in the United States and around the world.
Ongoing news releases and more information about CIBC can be found
at www.cibc.com/ca/media-centre.
SOURCE CIBC