U.S. President Donald Trump has been in office for over a month now, with markets seeing dramatic swings as the threat of tariffs looming over Canada.
The volatility is causing some Canadians to start watching their financial savings much closer.
Ray Sandhu, a computer science student, is one of them.
“For sure,” said Sandhu. “Just doing basic econ, I understand it’s going to impact the end consumer the most.”
Since Trump took office, the TSX is up 0.039 per cent while the S&P 500 is down 0.44 per cent.
“Very interesting when you look at the numbers since Jan. 20, inauguration day,” said Faisal Karmali, senior portfolio manager with Wood Gundy Popowich Karmali Advisory Group.
“We saw a big upswing; we’ve seen the volatility of downside.”
Karmali says initially, there was a rush of opportunity and growth in the U.S. and Canadian economies, bringing on an initial rally.
“Recently, with all the tariff issues and all the concerns and threats going across the world, we’re seeing the pullback in the markets, especially this week when we saw the markets pull back because of the tariff threats, “said Karmali.
While President Trump leaves many fearful over their finances, Karmali has a few pieces of advice.
“Stay patient for long-term money; be careful with short-term money,” said Karmali. “If you don’t need the money for seven years from now, the markets will give you some good opportunities. But you have to be more proactive in how you’re managing your money, not only in the market but outside of the market.”
For those who need their money sooner, he has advice for them as well.
“The less than seven years, make sure you’re not taking on the risk that you’re not willing to take given the volatility.”
RRSP deadline
The day before President Trump says his tariffs will be levied on March 4 is the Registered Retirement Savings Plan (RRSP) deadline.
“That money you get back from that tax refund you can use for other means: paying down debt, contributing to children’s education, a tax-free savings account, or other things that you may need. So, I think this is a good opportunity, regardless of what’s happening in the Trump administration,” said Karmail.
According to a survey by Edward Jones, only 39 per cent of Canadians plan to contribute to their RRSP in 2025.
https://www.edwardjones.ca/ca-en/why-edward-jones/news-media/press-releases/canadians-struggling-save-retirement
The survey also shared:
The survey also showed 15 per cent plan to contribute their maximum amount to their RRSP, a drop of six points from the previous year.
Younger Canadians (aged 18-34) are experiencing a notable decline, with just 41 per cent planning to contribute, down from almost 60 per cent last year.
One in 10 Canadians indicate they cannot afford to invest in their RRSP at all, in line with 2024 results.
The barriers most are facing in saving for retirement are insufficient income, high cost of living and debt repayment.
