Elevated housing costs driving Canadians to use retirement funds - study

Elevated housing costs driving Canadians to use retirement funds - study

Elevated housing costs driving Canadians to use retirement funds - study

Canadians are withdrawing ever-larger amounts from their registered retirement savings plans to cope with the consistent growth of home prices in the country’s most overheated markets, according to a nationwide survey of 1,500 plan holders.

Released on Tuesday (February 7), the fresh study conducted by Pollara for Bank of Montreal found that on average, Canadians have taken $17,213 from their RRSPs last year. This represented a notable increase from the $15,908 average in 2015.

“It’s concerning to see that so many Canadians are dipping into their RRSPs to meet short-term needs, which should only be considered as a last resort,” BMO Wealth Management director of wealth planning publications Chris Buttigieg told the Financial Post.

30 per cent of the respondents mentioned real estate price growth as the main factor driving their decision to dip into their RRSPs.

In B.C., roughly 38 per cent cited housing costs as the leading reason. This is despite the latest update from the Real Estate Board of Greater Vancouver, which stated that the benchmark price for homes (all types) declined by 3.7 per cent over the past half year (down to $896,000).

Respondents from the Atlantic provinces and the Prairies were the only ones who did not cite home purchases as the top reason for withdrawing from their RRSPs. In Atlantic Canada, Canadians too an average of $25,485, with 22 per cent mentioning large purchases other than homes.

The online survey was conducted from December 14 to 19, and is considered accurate to within 2.5 percentage points, 19 times out of 20.

 

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1 Comments
  • Michael 2017-02-09 12:07:52 PM
    Regarding people with equity in their properties, I get that some folks don't want to leave their homes, particularly older folks but come on, what's the point of dying of starvation or living in squalor when you have $500K equity in their homes. The people that are renting that don't have the equity are the ones I'm concerned about. They have no equity and they are using their retirement. This is where northern communities need to start promoting their areas as places to retire.
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