Dec. 23: BEST OF THE BLOGOSPHERE

December 23, 2024

Less than half of Canadians feel they are on track with long-term savings: TD survey

Just 49 per cent of Canadians surveyed by The TD Bank Group believe they “are on track with their savings,” reports Wealth Professional.

And about two-thirds of those asked cite “the common theme of the cost of living as the main factor disrupting their ability to put more money into savings or investments for their future financial security.”

But 45 per cent, Wealth Professional continues, “said they lack investment knowledge, and many more are either concerned that they have ineffective long-term investments, don’t have a plan, or are holding back from making any investments at all.”

The survey found that “the current economic climate” is making Canadians “cautious,” the article notes. “Thirty-five per cent are opting for liquidity in their choice of savings accounts rather than Tax Free Savings Accounts (TFSAs), registered retirement savings plans (RRSPs), or First Home Savings Accounts (FHSAs), especially as just 30 per cent know when it is appropriate to choose an RRSP versus a TFSA,” the article adds.

The survey found that the percentage of respondents who are actually investing is low.

“More than a third of respondents… have never invested and 58 per cent only do so once a year,” Wealth Professional reports. “Thirty per cent don’t have a personalized investment plan, with 29 per cent of that group believing they don’t save enough money to need one and 20 per cent not knowing where to start,” the publication adds.

“It’s no secret that Canadians are feeling the impact of the current economic climate in how they approach their investments, and that’s why it’s more important than ever to seek trusted advice,” Pat Giles, Vice President, Saving & Investing Journey at TD, tells Wealth Professional. “It’s encouraging to see that Canadians would feel more confident reaching their financial goals if helped by a financial professional. Having the right financial support can make a significant difference when it comes to planning for both short and long-term financial goals.”

The good news from the survey, the article notes, is that “the youngest cohort of adults, Gen Z, are already showing good financial habits.”

“While 44 per cent across all respondents recognize the benefit of improved financial planning in helping to achieve their financial goals, this includes just 32 per cent of Boomers and 43 per cent of GenXers, compared to 59 per cent of Gen Zs and 55 per cent of Millennials, with 68 per cent of Gen Zs also having the highest level of respondents who invest at least once a year,” reports Wealth Professional.

“Balancing competing saving and spending priorities can be challenging,” states Giles in the article. “It’s possible to enjoy the present while also investing and saving for the future. Setting financial goals doesn’t require a large amount to start; it’s about cultivating a habit of investing and sticking to it.”

Members of the Saskatchewan Pension Plan can start small when starting their retirement savings journey. You can contribute any amount up to the limit of your own RRSP room. You can also transfer in funds from any RRSPs you have. SPP will take your hard-earned savings and grow them in a low-cost, professionally managed pooled fund. When it’s time to turn savings into retirement income, your options include a lifetime monthly annuity payment or the more flexible Variable Benefit.

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Wealth Professional

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