Pension Planning Centre Blog / Uncategorized / Younger investors more likely to maximize RRSP contributions, study shows

January 23, 2012

Younger investors more likely to maximize RRSP contributions, study shows

If you knew that 15$/mo in savings can lead to Hundreds of Thousand of dollars towards your Retirement, would you jump at the opportunity? The majority of the population are SCARED because they do not know what they are going to retire on. This article demonstrates the POWER OF TIME…… Check it out and let me know what you think…

Financial Post ยท Jan. 14, 2012 | Last Updated: Jan. 14, 2012 6:28 AM ET

Those furthest from retirement are most likely to maximize their RRSP contributions each year, new research by TD Canada Trust suggests. The study found that 21% of those in their 30s do so, versus just 12% of those in their 40s and 14% of those in their 50s. TD Trust vice-president Andrea Phillips suggests that those wishing to achieve the same lifestyle in retirement as in their working years need to aim to save enough that it will generate 60% to 80% of their annual working income. Ms. Phillips likes regular pre-authorized chequing arrangements, suggesting even small increases in weekly contributions of $5 to $15 can result in surprisingly larger nest eggs. For example, assuming a 5.7% annual rate of return, a 25-year-old could generate an extra $115,000 by boosting weekly contributions by $15. But the later you start, the less-pronounced the impact: A 30-year-old will get just an extra $84,000 and a 40-year-old just $42,000 more.

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