Canadians are skipping contributions to their registered retirement savings plans and considering a delayed retirement amid the coronavirus pandemic, according to a new survey by Edward D. Jones & Co.
It found of the more than half (52 per cent) of Canadians won’t to contribute to their RRSP this year, 44 per cent cited the economic impact of the pandemic and 56 per cent prioritized other strategies, such as paying down their mortgage or investing in tax-free savings accounts.
While almost one-third (31 per cent) of Canadians will contribute to an RRSP in 2021, only 31 per cent of these respondents plan to invest the maximum amount. To highlight this economic uncertainty, the survey also cited a Statistics Canada report which stated Canada’s household savings rate is at its second highest level since the early 1990s, with Canadians saving 14.9 per cent of their disposable income in the third quarter of 2020 compared to just three per cent of Canadians doing so in the third quarter of 2019.
One-fifth (20 per cent) of respondents said they don’t think about their retirement at all and of those contributing to an RRSP, 20 per cent said they are only focused on accumulating wealth without any specific goal.
The survey also cited an August 2020 retirement study that indicated one in three Canadians will delay retirement due to the pandemic, predominantly for financial reasons including the need for more income, reduction in savings, loss of investment value and increased uncertainty about how much money will be needed in retirement.