Albertans feel poorly about RRSPs but are still saving

0:00Here's the thing, it's March 2nd. It's a big day. And I know that it doesn't get the same hype as NHL Deadline Day, but RRSP Deadline Day has a more direct impact on your bottom line than if Stan Bowman can get rid of Andrew Mangiappani while acquiring a middle six forward. Of course, you know, most of you know that RRSP's are a good way to lower your tax burden, but what else do we really know about them? No, the letters do not stand. The RRSP does not stand for Ryan Reynolds Superprotein as much as we wish it would. Turns out that a lot of Albertans feel a little bit in the dark when it comes to their RRSP's and some of the information around that. So to chat to us about this on RRSP Deadline Day, Julie Parchera, Director of Financial Planning for Edward Jones Canada on the line with us and good day to you. Good day to you as well. Yeah, so you guys looked at this from a few different lenses and I thought it was interesting because you'd looked at it from an emotional perspective and an understanding perspective and it seems that the numbers that you guys found suggest that RRSP's when we're dealing

1:04with them don't always leave us with the best feelings. That's right. So what we found is that and I'll talk about Albertans specifically, they have a lot of feelings about RRSP. So our data shows that 76% of Albertans report feeling negatively about their RRSP contributions and if we compare that to the national average, it's actually a bit higher to the national average in 70%. Interesting. So rather substantial number, you're talking about at least two in three. A lot of it comes from the fact that we understand that the headlines that the top line component of organ RRSP is but for example, I see the question on the bottom of my contribution form when I'm putting some money in my bank and it says, well, make sure your max contribution is for 2026 and I don't know where to find that number. Turns out I might not be alone with some of the confusion on this stuff. That's right and confusion. So we dug deeper. What are these negative emotions and what

2:06learning is that what Albertans feel is confusion, uncertainty and worry. To your point, what they do know is the contribution deadline. So they know that today is the deadline, but they are confused about how these accounts work. They are uncertain if they're using them correctly and they worry that they're not using them correctly. And when I say using them correctly, they don't understand so you put money in, you do get a deduction on the contribution. But what is that? What happens to the money in that account and then what does that look like on the back end? When and how do I take that money out and what's the value of that when I take it out? Yeah, and then there's the fact that we say RRSP, but there's a whole swap, let me not a whole swap, but a few different sort of headings on this. He gets the spousal RRSP for example, right, that I don't think people are necessarily aware about. Yeah, so RRSP, so what it does, and for, is registered retirement savings plan. And I think that that can lead to some of the confusion because an RRSP is a type of account. And it's one type of

3:12account. And to your point, it's not the spousal and it's not the group and it's not the employer sponsored, right? We're talking about the regular, let's say registered retirement savings plan. And this account is not a plan. It's a type of account. So the word plan can be confusing, a type of account. And it also works with other accounts, right? So it may work with the FHSA or the TFSA. So the best thing from someone's perspective is to understand how all of these accounts work together. And which account is best for you? And then what is that going to look like on the back end? And the way to do that is a part of a comprehensive financial plan or working with an advisor where they can explain to you, what's the best account for it? So first of all, what is your goal? What does retirement look like? Where are you? Who are you with? How much do you need to save? And then work backward to say, how much should you save? Where should you save it? So that is it in an RRSP? And what about, what amount will you need to save now in order to

4:16fund the retirement lifestyle that you're seeking? Yeah. And when we're talking about this too, it's interesting to me because there's definitely generational differences, I think, in terms of how people are going about investing for their future, right? Because RRSP, I think, to some degree, I think still feels a little stodgy for those young kids, those young whippersnappers who are looking at investment apps or cryptocurrency. What are you seeing in terms of generational differences when it comes to investing in the conversation around RRSPs? Yeah. So RRSP will start with the fact they are 69 years old. This account arguably was built for a different time. Retirement looks differently today. Canadians feel differently about retirement. Younger Canadians feel differently about retirement. But what's interesting about younger Canadians, and I only have national figures for this one, is they feel the most negative emotions about the RRSP yet. They are the most likely to contribute to these accounts anyway. So they say they're confused, uncertain, and worried about

5:18how they work, but they're contributing anyway. All right. Well, there you go. And yeah, just for that, where would I find that information, by the way, to find out what my maximum allowable contribution is, where's that buried in the documents? Yeah, so high level, right? It's 18% of your income. Up to a maximum of $32,490. But the best thing to do is to log into your CRA account, because that will take into account if it's reduced by a pension that you have, if you have carry-forward room, if you didn't max your contribution in the past, or if there's any adjustments that need to be made. So that will give you your personal limit. Okay, perfect. I will do that before the end of business day, just to be sure. Julie, this has been good. I appreciate the insight, and certainly a good reminder for folks that maybe it's not quite as scary as it feels when it comes to the conversation around RISPs. Emily here to help. Thank you. Julie Fechira,

6:19Director of Financial Planning over at Edward Jones, Canada, just bringing down some data that they had in a new survey that found that approximately two and three Canadians and Albertans even have slightly higher percentage. They're a little, not certain, they're there's uncertainty around RISPs and that makes them feel a little emotional that they don't necessarily understand things, but hopefully that helped to clear up some of the air around that on this final day that even contribute for 2025.