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Canadians prioritize saving for the future over debt repayment, says new RBC survey

Last Updated Jan 27, 2016 at 3:38 pm EDT

570 News file photo.

RBC has released a new survey that shows Canadians are more concerned about saving for retirement than paying down debt or short term saving.

Richa Hingorani is Senior Manager for Financial Planning Support with RBC. She told 570 news that this is the third year in a row that saving for retirement has been listed as the number 1 priority for Canadians.

“For the last three years, we’ve seen this trend. It was even higher this year with 54 per cent saying that retirement savings is the priority, I think a lot of it has to do with the whole approach to thinking long-term. One of the key things as well is that most people seem to have a plan in place.”

Hingorani said that this is especially surprising, as Canadians are facing low interest rates, a low-value loonie and volatile markets.

“Even with the challenging markets that we’ve been experiencing, Canadians are still saying that retirement savings is their number one priority. We also found that there’s a difference between age groups and how they think about life priorities and savings– with younger Canadians between 18 and 34, they seem to find it tougher to balance between short term and long term priorities. The younger Canadians seem to be more focused on debt repayment and fewer seem to be saving for retirement.”

Hingorani said that it would be beneficial for young Canadians that are worried about managing finances, to create and stick to a solid financial plan.

“People who are younger say they are worried about managing to keep their heads above water, and it’s the same age group that does not have a financial plan in place. Worse is, those who do have a plan, actually say they are more likely to stay on track for those long term goals. So that shows that it’s a big advantage to have a financial plan in place.”

The survey also showed that almost half of Canadians do not have a solid financial plan, and that TFSA’s are top RRSP’s as a preferred savings plan.

Hingorani added that a discussion with a financial planner can actually give client’s peace of mind, as it provides a solid foundation for the plan and are able to speak with a professional about staying on course.

“People are starting to understand the flexibility of a tax-free savings account, which is where we see younger people embracing the accounts, and those approaching retirement are also utilizing it to balance the flexibility yet take the tax advantage that RRSP’s have to offer.”

The 26th Annual RBC RRSP Poll was conducted by Ipsos from November 11 to 19, 2015 on behalf of RBC Financial Planning, through a national survey of 2,217 Canadians over 18 years of age.

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Hingorani added that all┬áCanadians can access RBC’s Financial Planner for free planning, budgeting and savings advice and resources, or to find the nearest Investment and Retirement Planner.