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Prominence of Canadian pension plans moving up

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Almost 90 percent of Canadians plan to rely on the Canada Pension Plan/Quebec Pension Plan (CPP/QPP) to cover costs during their golden years, according to a new report from BMO Financial Group.

BMO’s Registered Retirement Savings Plan (RRSP) study reveals that almost 31 percent of Canadians say they plan to rely “heavily” on the CPP/QPP, despite the fact that the average monthly CPP payout is less than $600.

“Given the amount that the CPP or QPP pays out, Canadians should not rely on them as a primary source of income to fund their retirement,” says Chris Buttigieg, BMO’s senior manager of wealth planning strategy. “Rather, they should consider the CPP and QPP to be a supplementary component of their overall retirement income solution and focus on creating their very own ‘personal pension plan’ by [regularly] contributing to an RRSP.” RSRP is Canada’s equivalent of a tax-favored individual retirement account.

The study also identified the sources of income Canadians plan to use to fund their retirement outside of the CPP/QPP:

  • Personal savings such as RRSPs, TFSAs, etc. – 88 percent;
  • Part-time job - 59 percent;
  • Sale of home/property - 49 percent;
  • Inheritance - 40 percent;
  • Hoping to win the lottery - 34 percent, including 14 percent relying “heavily”;
  • Support from family/children - 28 percent.

Regional Breakdown:

Region Relying on the CPP/QPP to fund their retirement Relying on personal savings to fund retirement Relying on winning the lottery to fund their retirement
National 89% 88% 34%
Atlantic 84% 81% 32%
Quebec 94% 85% 36%
Ontario 87% 89% 33%
Prairies 88% 95% 29%
Alberta 92% 92% 32%
B.C. 86% 92% 41%


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