Nearly a third of millennials not knowledgeable about RRSPs: survey
A man looks at a retirement planning brochure Monday, January 13, 2014 in Montreal. (Ryan Remiorz / THE CANADIAN PRESS)
The Canadian Press
Published Monday, January 18, 2016 4:37AM EST
OTTAWA - Nearly a third of young Canadians admit they are "not at all knowledgeable" about retirement savings plans, according to a survey done for TD Bank.
The report also suggested that a large proportion of those aged 18 to 33 are uninformed about what registered retirement savings plans can and cannot be used for.
Only half of those surveyed knew that money in an RRSP could be used to help buy their first home, while just 28 per cent knew it could be used to help further their education later in life under the lifelong learning plan.
The survey also found that many young Canadians believed they could use RRSP savings to pay for many things that are not allowed.
Sixty-four per cent were unaware that RRSP savings could not be used to make a charitable donation and 60 per cent mistakenly believed that they could be used to pay childcare expenses.
Fifty-two per cent also incorrectly believed money in an RRSP could be used to finance a car and half wrongly thought it could be used to help buy a second home.
Linda MacKay, senior vice-president for personal savings and investing at TD Canada Trust, said that the earlier people start saving for retirement, the better off they will be.
"The interesting thing with millennials is they do prioritize retirement as important ... but often don't know how to get started or think their budget can accommodate it," she said.
MacKay said starting early, even if the amount is small, can make a significant difference.
"No amount is too small," she said.
The online poll done by Environics Research for TD Bank surveyed 2,115 respondents aged 18 or older including 613 between 18 and 33 between Oct. 30 and Nov. 5, 2015.
The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.