July 29: BEST FROM THE BLOGOSPHERE

July 29, 2024

Half of Canadian women have just $5,000 saved for retirement: HOOPP

New research from the Healthcare of Ontario Pension Plan (HOOPP) has found that nearly half of Canadian women have saved less than $5,000 for retirement, and that “most Canadians feel unprepared for retirement.”

A media release from HOOPP outlining the results of the research appeared in a recent edition of the Financial Post.

HOOPP’s 2024 Canadian Retirement Survey found that today’s retirement outlook for Canadians is “particularly bleak,” citing “a rising cost of living and persistent interest rates.”

The survey, which HOOPP carried out with Abacus Data, found that “one in five (22 per cent) have no savings at all” for retirement. “Canadian women report having less in savings and a reduced capacity to save compared to men,” the release notes. And while 49 per cent of women have less than $5,000 in retirement savings, men aren’t doing that much better – 33 per cent of them also have less than $5,000 in retirement savings, the release notes.

“We know women make less money than men and they are more likely to work part-time or take time off work to have children or look after their families,” states HOOPP’s Ivana Zanardo in the release. “Factor in rising expenses and prolonged high interest rates and it’s no surprise that their retirement security is paying the price.”

A lack of ability to save may be what’s driving the “bleak” outlook for retirement, the release continues.

A whopping 57 per cent of Canadians “feel unprepared for retirement,” the release notes – that’s 64 per cent of women and 49 per cent of men.

Women, who already have less in savings, say they “have less money coming in to save,” the release adds; in all 36 per cent of women felt this way. Nearly half of men felt the same way, the release reports.

With less money coming in, saving for retirement isn’t always seen as a top priority, the research finds.

“Affording the day to day” is seen as a top priority by 57 per cent of women and 49 per cent of men, the release states. Fifty-one per cent of men see saving for retirement as a top priority versus 46 per cent of women, but “even so, all Canadians continue to feel concerned about affording daily life (70 per cent) against a challenging economy,” the release continues.

“Over the last few years, we’ve seen Canadians struggle to keep up, first with inflation and now with interest rates and the cost of living,” states David Coletto, CEO, Abacus Data, in the release. “But a small cut in interest rates won’t provide enough relief for Canadians, who told us they expect rates to continue to impact their ability to save even if they decrease slightly in the short-term.”

Other noteworthy findings:

• One in ten (13 per cent) unretired Canadians don’t think they’ll ever retire and one in four (26 per cent) plan to continue to work in retirement in order to support themselves.
• Significantly more women feel anxious (51 per cent of women compared to 39 per cent of men), fearful (50 per cent vs. 37 per cent), frustrated (50 per cent vs. 42 per cent) and sad (46 per cent vs. 36 per cent) about their financial situation.
• Almost half (49 per cent) of unretired adults have saved nothing for retirement in the last year, as all Canadians continue to worry about having enough money in retirement (58 per cent). 
• Even as they navigate a challenging economic environment, the vast majority (70 per cent) of Canadians continue to agree they would trade some of their salary for a pension (or a better pension).

HOOPP has been pointing out the need for Canadians to have better access to retirement programs like pensions for many years. When you look at even the “maximum” benefits payable through the Canada Pension Plan, Old Age Security and even the Guaranteed Income Supplement, they are modest. You need to augment that basic income via savings from workplace retirement programs or your own personal nest egg.

If you are able to take part in a workplace pension plan, be sure you are contributing as much as you can. If you don’t have a workplace program, take a look at the Saskatchewan Pension Plan, an open defined contribution plan available to any Canadian with registered retirement savings plan room.

SPP will invest your retirement savings dollars in a low-cost, professionally managed pooled fund that has had excellent returns over the years. When it’s time to retire, your options include a lifetime monthly annuity payment, or the flexibility of SPP’s Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Financial Post, HOOPP

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