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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