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BMO Annual Retirement Study: Canadians Believe They Need $1.7M to Retire - Up 20 Per Cent from 2020


TORONTO, Feb. 7, 2023 /CNW/ - BMO's 13th annual Retirement Study reveals Canadians are prioritizing retirement savings as both contributions and account holdings have increased from the previous year. The study found that Canadians believe they will need $1.7 million to retire, up 20 per cent from 2020 ($1.4 million). However, fewer than half (44 per cent) of Canadians are confident they will have enough money to retire as planned, a 10 per cent decrease from 2020.

According to BMO Economics, Canadian CPI inflation hit a four-decade high of 8.1 per cent in the summer of 2022 but has fallen to 6.3 per cent as of December 2022 and is expected to decline to around 3 per cent by the end of the year. The sharp increase in 2022 exceeded wage gains, resulting in a significant loss of purchasing power for most families. BMO's Retirement Study found that 74 per cent of Canadians are concerned about how current economic conditions, most notably inflation and rising prices, will affect their financial situation, and 59 per cent believe this will affect their confidence in meeting their retirement goals.

The average amount held in RRSPs nationally is $144,613, a two per cent increase from 2021 ($141,923). 43 per cent of Canadians have already contributed to their RRSPs for the 2022 tax year, and another 14 per cent plan to contribute before the March 1, 2023 deadline.

Region

Average Amounts

Average RRSP

Held in RRSPs

Contributions

Atlantic

$127,814

$8,115

Quebec

$125,751

$6,155

Ontario

$162,913

$7,435

Prairies

$138,391

$7,429

Alberta

$157,405

$7,054

B.C.

$125,573

$7,298

National

$144,613

$7,058

 

"While the anticipated headwinds in 2023 will understandably prompt concerns about how inflation and interest rates will affect our finances, Canadians remain resilient and are taking proactive measures to protect and invest in their retirement nest egg," said Nicole Ow, Head, Retail Investments, BMO. "As Canadians continue to look to save for retirement, working with a professional advisor can help them understand the investment opportunities available and make progress towards achieving their financial goals with confidence." 

Painting a Retirement Portrait

The survey also provides insights into Canadians' approaches to retirement planning, including:

"Financial advisors are powerful resources who can help Canadians remain focused on their financial goals during disruptions, major life events and uncertainty. While it is a confusing and intimidating time for many, an advisor can help alleviate some of the financial pressures by helping Canadians create a personalized plan and stress test the strategies through different market conditions and situations to help them stay on track towards their immediate and long-term goals," said Ms. Ow.

For more information on BMO's investment plans, visit www.bmo.com/investing and book an appointment or visit a branch to speak to an investment professional today

For more information on BMO Registered Retirement Savings Plan Accounts and opening an account, please visit www.bmo.com/rrsp/.

The BMO RRSP Survey was conducted by Pollara Strategic Insights via an online survey of 1,500 adult Canadians conducted between November 4th and 7th 2022. The margin of error for a probability sample of this size is ± 2.5%, 19 times out of 20.

About BMO Financial Group

Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $1.14 trillion as of October 31, 2022, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group


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