Canadians trying other retirement saving options

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VANCOUVER (NEWS1130) – You have just 6 days to contribute to RRSPs. But a study says many of you, especially baby boomers, are opting for other ways of saving money,

Contributions are the lowest we’ve seen since the 1970s. That’s according to RBC.

As baby boomers move into their 50s and near traditional retirement age, many are past their saving years.

Bryan Yu, an economist with Central One Credit Union explains, “[They are] generating less income, less money to put into RRSPs. But also there are restrictions, they do have to convert RRSPs at a certain age. It might be just a rational decision on their part.”

He adds there are alternatives to RRSPs. “For examples like TFSAs that individuals can put their money into. Also, individuals may be looking at the market in terms of where they are storing their money.”

The study found as house prices increase, Canadians have been using real estate investments as an option for parking their money, too.

A quarter of Canadians eligible to contribute to RRSPs tell Harris-Decima they still want to make a contribution for the 2011 tax year, despite the deadline being less than a week away.

RRSPs aren’t the only thing affected by the age shift of boomers. So is the labour market.

New numbers from TD show those 60 years old and over account for one-third of all the job gains since July 2009. But the study says they are still only eight per cent of the total labour force.

Yu doesn’t think it’s necessarily a bad thing for young people. “Some older people are moving from professional jobs into potentially some retail or service-oriented jobs…jobs that are perhaps more interesting and less taxing on the body. That opens up opportunities for individuals who have come out of university or schooling.”

Researchers believe this will counterbalance the expected decline in labour force growth in coming years.
 
   

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