As Millennials move into their 30s, they share many of the same life goals as previous generations of Canadians; where they differ is in the challenge they face in financing those goals, according to RBC’s annual Financial Independence in Retirement Poll.
Poll findings indicate several financial disconnects for Millennials aged 25-34. While almost half (48%) of these respondents cited home ownership as a top financial priority, just over one quarter (28%) reported putting money toward this goal in 2017.
Another disconnect appears in responses about saving for their future. While 46% of these Millennials included retirement savings as another top financial priority, only 38% actually put any money into retirement savings last year. In addition, half (50%) don’t have an RRSP. In fact, if they could only afford to contribute to either an RRSP or a TFSA, almost half (48%) opted for a TFSA, compared to less than one-third (30%) for an RRSP.
“TSFAs offer a great savings vehicle, but Millennials can’t overlook RRSPs, particularly as they move into their 30s,” noted Richa Hingorani, Senior Director, Digital Strategy, RBC Mutual Funds Distribution & RBC Financial Planning. “While retirement can seem so far away for these younger Canadians, we want them to know that time can work in their favour. By starting to invest even small amounts on a regular basis into an RRSP now, they can build their future savings through the magic of compounding within their RRSP, with growth through a combination of interest and potential dividends.”
On the flip side, Millennials surpassed one of their financial priorities for last year – saving to reduce/eliminate debt. While under half (47%) identified reducing debt as a priority, over half (51%) actually put money toward that priority.
“Millennials have their eye on the ball – they’re saving for immediate needs. We’d suggest it’s now time they look a bit farther down the road, to save for their future needs too,” explained Hingorani. “We’re here to connect with them however they wish – including through MyAdvisor, our new digital experience, which can help them build a personalized plan online, in just a few minutes.”
MyAdvisor offers clients a way they can connect at their own convenience with a live advisor – online, by live video, by phone or in one of our branches. Clients can also track the progress they are making toward achieving their financial goals, through an interactive dashboard.
“We know Millennials have very busy lives,” added Hingorani. “We want to help ensure their finances keep up with their lifestyle, today and in the future.”
About the RBC 2018 Financial Independence in Retirement Poll
These are a selection of findings of the 28th annual RBC RRSP Poll, conducted by Ipsos from November 9 to 16, 2017 on behalf of RBC Financial Planning, through a national survey of 2,000 Canadians aged 18+ who completed their surveys online. Where appropriate, attitudes and opinions are tracked back to previous years’ surveys. Quota sampling and weighting are employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.4 percentage points had all Canadian adults been polled. The credibility interval will be wider among subsets of the population, such as among Millennials aged 25-34 (± 5.9 percentage points). All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
About RBC’s MyAdvisor and financial planning advice
MyAdvisor provides a new digital experience for RBC clients by using an online advice platform to digitally connect a client to an advisor. MyAdvisor enables both the client and the advisor to view and adjust a dynamic dashboard showing the client’s savings and investment goals and to establish actions to achieve those goals – all in real time. MyAdvisor is a product of RBC’s Toronto-based innovation lab; other labs are located in the U.S., the U.K. and Europe. These innovation labs co-create new products and services based on direct input from RBC clients and employees.
RBC Financial Planning and rbc.com/savingsspot offer planning, budgeting and savings advice and resources and the RBC Retirement Planning website can help you plan for 30 years or more in retirement. In addition, for Canadians who want to get more from their day-to-day banking, protect what’s important, save and invest, borrow with confidence or take care of their businesses, RBC Discover & Learn offers free online advice, resources and tools, including the RSP-Matic Savings Calculator.
SOURCE RBC Royal Bank