Inflation adds uncertainty for Canadians trying to look past the pandemic and refocus on their financial future - RBC poll

·8 min read
  • Impact of inflation on retirement finances now one of Canadians' top concerns

  • RRSPs rebound, as financial priorities shift to longer-term saving and investing

  • Investors willing to pay fees for opportunity to gain higher returns

TORONTO, Jan. 21, 2022 /CNW/ - With inflation reaching the highest levels in the past 30 years, Canadians trying to refocus on their financial future now face a new uncertainty: the effects of rising inflation on their retirement savings. According to RBC's annual Financial Independence in Retirement Poll, inflation has now moved into the top three concerns Canadians have about retirement for the first time in more than a decade.

RBC Logo (CNW Group/RBC Royal Bank)
RBC Logo (CNW Group/RBC Royal Bank)

"When assessing value, investment performance after fees is what really matters. It's encouraging to see that younger Canadians understand how crucial this is in achieving your retirement savings goals and building a strong financial future."

Inflation is also limiting the ability of Canadians to increase any savings, as it continues to drive up the costs of fixed expenses – a key savings barrier referenced by 29% of poll respondents, with the largest number of these (40%) being aged 25 to 34. A majority (85%) of this younger age group also worries the most about trying to balance saving for today versus saving for their future.

There is a key difference across all age groups, however, despite the uncertainties posed by the pandemic and rising inflation. Today, almost half (48%) of Canadians have a financial plan and the majority (86%) of those say they are feeling positive about their financial future because of that plan.

"The unexpected has changed lives over the past two years, but if you have a plan, it's easier to adapt to those changes," says Stuart Gray, Director – Financial Planning Centre of Expertise, RBC. "A plan helps you keep on top of your finances, so you know what adjustments you can make for changing circumstances while saving for today and investing for the future."

One strong indicator that Canadians want to refocus on their financial future: RRSPs are making a big comeback. After seven years of trending downward – and last year's historic low of 46% – RRSPs have rebounded and now over half (53%) of Canadians have RRSPs in place to save and invest for their retirement. Also, within those RRSPs, more Canadians are holding mutual funds (36% vs. 30% last year), stocks (20% vs. 14%) and ETFs (11% vs. 7%).

Another future-focused indication in poll findings: the percentage of Canadians who are building their investment portfolios has risen to 28% from 25% last year (and 10 points higher than a decade ago). Of particular note, younger investors aged 25 to 34 are also expressing the most interest in building these portfolios (32%). Since the onset of the pandemic, these younger investors are also focusing more attention on the value of their investments (22%) and almost half (48%) indicate they are willing to pay fees if this offers the opportunity to gain higher returns on those investments.

"When assessing value, investment performance after fees is what really matters. It's encouraging to see that younger Canadians understand how crucial this is in achieving your retirement savings goals and building a strong financial future," adds Gray. "Whenever you want advice, our financial advisors are here to help – in person or through our MyAdvisor digital advice platform, which connects you to an interactive, personalized plan where you can review forward-looking projections and try out different savings scenarios. This makes it easy to see how changes you make to your savings and investments today can impact your finances in the future."

Fast Facts: RBC 2022 Financial Independence in Retirement Poll
Selected findings – National and regional

Top concerns about
retirement finances

NAT'L

BC

AB

SK/MB

ON

QC

AC

Having enough savings

47%

43%

44%

47%

47%

52%

44%

Maintaining my standard
of living

36%

39%

31%

34%

36%

42%

29%

Impact of inflation

29%

33%

31%

28%

29%

26%

32%

The cost of healthcare

27%

30%

25%

21%

24%

31%

29%

Outliving my savings

25%

29%

30%

29%

28%

16%

29%

Barriers to saving more

NAT'L

BC

AB

SK/MB

ON

QC

AC

Income too low

36%

38%

41%

45%

37%

30%

34%

Fixed expenses too high

29%

35%

38%

37%

29%

22%

24%

No money left over at the
end of the month to save

26%

25%

30%

32%

24%

25%

31%

Unexpected expenses
(dentist, car repairs, etc.)

26%

32%

36%

29%

23%

22%

27%

Unsteady work income

13%

13%

17%

9%

14%

11%

10%

Have a financial plan?

NAT'L

BC

AB

SK/MB

ON

QC

AC

Yes, I do

48%

47%

49%

49%

51%

44%

46%

RRSPs

NAT'L

BC

AB

SK/MB

ON

QC

AC

Yes, I have an RRSP

53%

50%

51%

55%

56%

55%

44%

RRSP holds mutual funds

36%

42%

40%

40%

38%

27%

35%

RRSP holds stocks

20%

30%

11%

19%

22%

15%

11%

RRSP holds ETFs

11%

13%

12%

5%

13%

10%

2%

Investing during pandemic

NAT'L

BC

AB

SK/MB

ON

QC

AC

Building my investment
portfolio

28%

33%

20%

24%

32%

27%

20%

Focusing on the value of
my investments

22%

24%

19%

25%

24%

21%

15%

Willing to pay fees for
higher returns

46%

49%

47%

42%

46%

44%

43%

Fast Facts: RBC 2022 Financial Independence in Retirement Poll
Selected findings – National, gender and age group

Top concerns about
retirement finances

NAT'L

M

F

25-34

35-54

55+

Having enough savings

47%

44%

49%

58%

55%

36%

Maintain standard of living

36%

33%

38%

44%

40%

31%

Impact of inflation

29%

30%

28%

32%

26%

34%

The cost of healthcare

27%

26%

27%

21%

26%

32%

Outliving my savings

25%

23%

27%

20%

26%

26%

Key barriers to saving more

NAT'L

M

F

25-34

35-54

55+

Income too low

36%

32%

40%

41%

35%

32%

Fixed expenses too high
(rent, mortgage, food, etc.)

29%

24%

35%

40%

32%

23%

No money left over at end
of the month to save

26%

21%

30%

26%

30%

22%

Unexpected expenses
(dentist, car repairs, etc.)

26%

21%

31%

32%

29%

22%

Unsteady work income

13%

12%

13%

15%

13%

8%

Have a financial plan?

NAT'L

M

F

25-34

35-54

55+

Yes, I do

48%

49%

48%

47%

44%

53%

RRSPs

NAT'L

M

F

25-34

35-54

55+

Yes, I have an RRSP

53%

57%

51%

53%

61%

54%

RRSP holds mutual funds

36%

35%

37%

33%

38%

38%

RRSP holds stocks

20%

25%

12%

21%

19%

16%

RRSP holds ETFs

11%

14%

8%

16%

10%

10%

Investing during pandemic

NAT'L

M

F

25-34

35-54

55+

Building my investment portfolio

28%

33%

24%

32%

27%

26%

Focusing on the value of my investments

22%

26%

19%

22%

19%

27%

Willing to pay fees for higher returns

46%

49%

43%

48%

46%

43%

About the RBC 2022 Financial Independence in Retirement Poll
A total of 2,000 surveys were completed online by Ipsos among Canadians aged 18+ from October 22 to 30, 2021 using the Ipsos I-Say Panel for this poll, which has been conducted on behalf of RBC for over three decades. Quota sampling and weighting was employed in order to balance demographics and ensure that the sample's composition reflects that of the actual population of Canadians, according to Census data. The precision of online polls is measured using credibility interval. In this case, the results are accurate to within ± 2.5% percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been surveyed. Credibility intervals will be wider for smaller subsets of the population. Where appropriate, attitudes and opinions are tracked back to previous years' polls.

About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 87,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.

About RBC and our unique MyAdvisor personalized planning support
We believe that every Canadian deserves a personalized plan. MyAdvisor – a digital advice platform only available at RBC – has now connected over 2.8 million Canadians to their personalized plan and the ability to adjust those plans in real time. MyAdvisor offers a hybrid approach, so you don't have to choose between digital or human – you get both. Along with 24/7 digital access to your plan, cash flow, net worth and goals, you receive insights, real-time visuals and forecasts to help stay on top of your money and reach your goals. MyAdvisor also connects you to the expertise of an RBC advisor in your community, via live video, phone or in-person within a branch. Through interactive scenario planning, you can see the potential future impact of today's money decisions on tomorrow's outcome. Whether you're planning for retirement, saving for your first home, or somewhere in between, we can help.

SOURCE RBC Royal Bank

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