Mar 24: BEST FROM THE BLOGOSPHERE

March 24, 2025

Living costs, debt are main barriers to saving: IG research

A recent study by Winnipeg’s IG Wealth Management took a hard look at what’s preventing Canadians from saving for retirement – and the high cost of living, and personal debt, are near the top of the list.

A recent article on Advisor.ca, authored by Jonathan Got, took a look at the survey’s key findings.

An overwhelming 80 per cent of the 1,500 Canadians surveyed cited “the rising cost of living” as their chief barrier to saving for retirement, the article notes. A significant percentage of the sample – 38 per cent – said they “put off saving for that goal (retirement) to repay debt.”

Only 18 per cent of those surveyed took the position that living in the now is more important than saving for retirement – they said they “preferred to enjoy their current lives,” the article tells us.

Forty-six per cent of the sample felt that their priorities should be on current living costs. They said, “they prioritize spending on their current needs and wants, despite many wishing to save for retirement to travel or take on other hobbies,” the article adds.

“Rising costs and mounting debt repayment challenges often undermine Canadians’ ability to save for retirement,” states Christine Van Cauwenberghe, head of financial planning at IG Wealth Management, in the article.

The article goes on to note that those surveyed spent “roughly 67 per cent of their income on basic living expenses, 20 per cent on leisure activities and 12 per cent on retirement.”

Other findings cited in the article:

• One-third of respondents planned to keep working in retirement “to afford basic living expenses, supplement income, or maintain social connections.”
• Thirty-eight per cent of respondents want to travel in retirement; “one third would focus on hobbies and 17 per cent saw themselves working part-time or consulting.”

The figure that jumps off the page from this research is that people are spending 67 per cent of their income on basic living expenses.

The Statista Consumer Insights survey reveals another concern – that people are having to dip into their savings to pay for current living costs.

Fifty-nine per cent of Canadians say their cost of living has increased “notably,” the study notes, with 26 per cent of Canadians saying they had to dip into their savings to make ends meet.

Only Australians (at 29 per cent) were dipping into their savings more than Canadians.

What does all of this suggest? Obviously, saving for retirement is a difficult thing to do, particularly when you have no control over increases in the cost of housing, food, fuel, and overall living. You may have to start small, or reduce the amount you’re saving, but it’s important to keep that nest egg building, to help you in a future where you are no longer bringing home a paycheque.

If you have a pension program at work, be sure to sign up and contribute to the max. If you don’t, a smart option is to join the Saskatchewan Pension Plan. SPP will take on the hard part of retirement saving – the investing part. SPP will grow your savings in their low-cost, professionally managed pooled fund. You can make savings automatic by transferring money in from your bank account each payday – start small, and increase your savings when your income goes up.

At the finish line – retirement – your options will include a monthly annuity payment for life, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Advisor.ca, Statista Consumer Insights

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