- A new survey reports that Canadians are favouring their tax-free saving accounts over other, longer horizon investments such as RRSPs
- The poll comes via Canadian Imperial Bank of Commerce, which also found that 57 per cent of Canadians indicate they are more concerned with meeting their current needs versus saving for their future
- 42 per cent of respondents say they are focusing on achieving predictable returns versus aggressive growth
- CIBC stock opened trading at C$60.72 per share
A new survey reports that Canadians are favouring their tax-free saving accounts (TFSA) over other, longer horizon investments such as RRSPs.
The poll comes via Canadian Imperial Bank of Commerce (TSX:CM), which also found the majority of Canadians (57 per cent) indicate they are more concerned with meeting their current needs versus saving for their future.
In the face of higher costs of living, fears of a recession, and looming uncertainty around global conflicts, 42 per cent of respondents say they are focusing on achieving predictable returns versus aggressive growth.
Most Canadians (67 per cent) have some type of investment product; however, among investors that own an RRSP and a TFSA, 45 per cent say they chose to contribute more to their TFSA.
Fifty-three 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.
Further survey highlights
- 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
- One third of RRSP holders are not planning to make contributions this year
“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,” CIBC’s vice president financial and investment advice, Carissa Lucreziano, said in a news release. “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.”
Given that Canadians usually expect to retire from the workforce around the age of 60, this can be quite significant, because more than half admitted to either not being able to save, or not knowing whether they are saving enough for retirement.
57 per cent of those who took the poll worry they may run out of money in their retirement years while one third (31 per cent) admit they have delayed their plans because of inflationary pressures and 23 per cent say they haven’t started saving for retirement at all.
CIBC is one of the top North American financial institutions with more than 13 million personal banking, business, public sector and institutional clients.
CIBC stock opened trading at C$60.72 per share. The stock is down by 1.17 per cent year-over-year and by 45.07 per cent since 2019.
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