Although many Canadians would dearly love to enjoy their ‘golden years’, a new poll suggests that that may be more of a dream than reality.
According to the Canadian Payroll Association (CPA),” 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement." “
Considering this data, this is perhaps a bit of a wake-up call for those who are self-employed as well, given the demographic shift in this country- and the knowledge that Federal Pension programs will not be enough to support some down the road through retirement. For those who work for themselves, funding retirement falls squarely on their own shoulders, and takes long-term planning- and saving over time- to achieve the dream of the ‘golden years’.
The report says, “A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.”
“The numbers were even higher for younger Canadians aged 18 to 34 (63%) and single parents (74%). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60%) and the Atlantic provinces (64%), which may be the result of their slower recovery since the last recession. Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund.”
74% of Canadians say that they have saved less than one quarter needed to reach their retirement goal.
"This is particularly troubling when you realize that 71% of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54," states Dianne Winsor, CPM, Chairman of the CPA.
To compound the worry, half of the respondents said that they were saving 5% or less of their pay, and 40% indicated that they were not planning on trying to save more.
According to the findings of the survey, there is a disconnect between what is actually happening, and what needs to happen in order for people to reach their financial goals- which includes eliminating or reducing credit card debt, paying down mortgage and consistently building up savings.