Becoming a millionaire `more achievable than you realize’: bank says

While most young Canadian adults apparently don’t believe it, a major bank says becoming a millionaire by retirement is a realistic goal.

TD Canada Trust on Wednesday released survey results showing three-quarters of respondents said they thought it unlikely they’ll be worth $1 million by the time they retire.

In fact, one-third of those surveyed said that winning the lottery was a better bet for becoming a millionaire than saving enough money.

TD, however, says accumulating wealth of $1 million or more is "more achievable than you realize" for the 18 to 34 age group included in the survey.

It offered the following advice: Start putting $100 a month into a registered retirement savings plan (RRSP) at the age of 25; up that to $250 at the age of 30; $500 at 35; $750 at 40; and keep RRSP savings at $1,000 a month between the ages of 50 and 65.

"If you do the math, you quickly realize that retiring with a million dollars is achievable for a significant number of young people with a steady and growing income, who have the advantage of time and compound interest on their side," said TD Canada Trust senior vice-president Carrie Russell.Ê

The calculations assume an annual return on RRSP investments of 6.8 per cent.

TD said the survey suggests many young Canadians overestimate how much money needs to be saved to hit the $1-million mark; 16 per cent said it would take monthly savings of between $1,000 and $2,000, while just as many assumed it required more than $2,000 being put away each month.

The survey of 689 Canadians was conducted online by Angus Reid between Feb. 4 and Feb. 5. TD said the results were weighted by education, age, sex and region to make it representative of Canada’s 18-34 population. No margin of error was provided.