August 5: BEST FROM THE BLOGOSPHERE

August 5, 2024

Are Canadians putting enough away for retirement?

Writing for Yahoo! Finance, Andrew Button of Motley Fool Canada takes a look at where Canadians are with their registered retirement savings plan (RRSP) balances.

The numbers he found were a little low.

While Canada does not collect savings by age group data, he estimates that “the average single Canadian has about $12,949 saved in his/her RRSP for retirement.”

“Statistics Canada’s 2019 data says that Canadians under 35 have $9,905 in their RRSPs, and Canadians between 35 and 44 have $15,993 in their RRSPs. The average of these two is $12,949. Assuming that single Canadians’ retirement savings increase linearly over time, $12,949 should be pretty close to the amount single Canadians have in their RRSPs,” he explains.

The picture is brighter, he reports, for “economic families,” who have about $140,000 saved in the age 35 to 45 bracket. The term apparently refers to people living together.

OK, $140,000 sounds good – better than $12.9K. But are these folks on track to save what they need?

Button looks at that question.

“Most financial advisors recommend that Canadians retiring soon have $750,000 saved for retirement. If that figure is accurate, then it would appear that single Canadians are a ways away from being able to retire comfortably, while families are faring better. Either way, if you have more than $140,000 saved, you are ahead of the curve. That sum can easily be turned into $750,000 over a few decades (although your required amount will increase due to inflation),” he writes.

He concludes his piece by noting that investing may provide a way to grow your retirement savings.

“If you’re concerned about approaching retirement age with inadequate savings, you can try investing. Dividend stocks, index funds, and GICs are popular assets for RRSPs. A portfolio comprised of such assets may help you retire in comfort,” he concludes, providing examples of a Canadian utility stock and the annual dividends it provides.

If you are saving on your own for retirement, making the right investment decisions can be challenging. There are both risks and rewards to investing.

Fortunately, there’s a way you can get professional investment for your retirement savings at a low cost – have a look at the Saskatchewan Pension Plan. SPP will invest your hard-earned savings in a pooled, low-cost and diversified fund that is invested in Canadian, U.S. and international equities, bonds, mortgages, and more.

You decide how much you want to contribute (and contributions are tax deductible) each year, and you can transfer in any amount from other RRSPs you may have.

At retirement, your choices include a lifetime monthly annuity payment, or SPP’s flexible Variable Benefit option.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Yahoo! Finance

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