According to this year’s RBC (TSE: RY) Financial Independence in Retirement Poll, inflation is one of the top three retirement concerns Canadians have.
Canadians Trying to Refocus Financial Future
Inflation is limiting Canadians’ ability to save more, as it continues to drive up the burden of fixed expenses — a significant barrier to saving cited by 29% of survey respondents, the majority (40%) being between 25 and 34 years old.
One indicator confirms that Canadians want to refocus on their financial futures: registered retirement savings plans (RRSPs) are making a comeback.
After seven years of a downward trend — and a historic low of 46% last year — RRSPs have rebounded. More than half (53%) of Canadians now have an RRSP.
The percentage of Canadians building an investment portfolio rose from 25% last year to 28%. Young investors aged 25 to 34 are those who show the most interest in building such a portfolio (32%).
Since the start of the pandemic, these young investors have become more focused on the value of their investments (22%) and almost half (48%) indicate that they are ready to pay a fee if it allows them to obtain higher returns.
Management Commentary
“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,” said Stuart Gray, director, Financial Planning Centre of Expertise, RBC.
“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.”
Wall Street’s Take
On January 19, Barclays analyst John Aiken kept a Buy rating on RY, with a price target of C$157. This implies 8% upside potential.
The rest of the Street is bullish on RY with a Strong Buy consensus rating based on six Buys and two Holds. The average Royal Bank of Canada price target of C$145.57 implies 1% upside potential to current levels.
TipRanks’ Smart Score
RY scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns should outperform the overall market.
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