Millennials share many of the same life goals as previous generations of Canadians; where they differ is in the challenge they face in financing those goals, according to Royal Bank of Canada’s (RBC) annual Financial Independence in Retirement Poll.
Poll findings indicate several financial disconnects for millennials aged 25-34. While almost half (48%) of these respondents cited home ownership as a top financial priority, just over one quarter (28%) reported putting money toward this goal in 2017.
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Another disconnect appears in responses about saving for their future. While 46% of these millennials included retirement savings as another top financial priority, only 38% actually put any money into retirement savings last year.In addition, half (50%) don’t have an RRSP.
RRSP v TFSA
If they could only afford to contribute to either an RRSP or a TFSA, almost half (48%) opted for a TFSA compared to less than one-third (30%) for an RRSP.
“TSFAs offer a great savings vehicle, but Millennials can’t overlook RRSPs, particularly as they move into their 30s,” said Richa Hingorani, Senior Director, Digital Strategy, RBC Mutual Funds Distribution & RBC Financial Planning. “While retirement can seem so far away for these younger Canadians, we want them to know that time can work in their favour. By starting to invest even small amounts on a regular basis into an RRSP now, they can build their future savings through the magic of compounding within their RRSP, with growth through a combination of interest and potential dividends.”
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By GlobalDataOn the flip side, Millennials surpassed one of their financial priorities for last year – saving to reduce/eliminate debt. While under half (47%) identified reducing debt as a priority, over half (51%) actually put money toward that priority.
“Millennials have their eye on the ball – they’re saving for immediate needs. We’d suggest it’s now time they look a bit farther down the road, to save for their future needs too,” explained Hingorani.
“We’re here to connect with them however they wish – including through MyAdvisor, our new digital experience, which can help them build a personalised plan online, in just a few minutes.”
RBC’s MyAdvisor tool offers clients a way they can connect at their own convenience with a live advisor – online, by live video, by phone or in one of our branches. Clients can also track the progress they are making toward achieving their financial goals, through an interactive dashboard.
“We know Millennials have very busy lives,” added Hingorani. “We want to help ensure their finances keep up with their lifestyle, today and in the future.”
