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Retiring boomers leading downward trend
Toronto (January 19, 2010) — The amount of money that Canadians are saving for retirement has been declining for a decade, and the trend is likely to continue through 2020 as the aging of the Canadian population progresses over the next decade, according to a study by the Royal Bank of Canada (RBC).
Contributions to registered retirement savings plans (RRSPs) grew steadily from the late 1960s. Since 1997, however, there has been a "decidedly downward trend" in the RRSP savings rate, according to the RBC report.
One of the key factors behind the decline in RRSP contributions can largely be pinned on changing demographics. The RBC report found that the savings pattern for various age groups is quite distinct with those aged 34 and under the least likely to make RRSP contributions. The biggest increase in contributions occurs when individuals move into the 35-44 age group followed by a smaller rise going into the 45-55 age bracket. Contributions start to move lower after age 55.
Other factors impacting on RRSP contribution levels identified by the study identified ieconomic slowdown, weakening incomes and health of the stock market.
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