Mar 31: BEST FROM THE BLOGOSPHERE
March 31, 2025
Canadians think they’ll need $1.5 million to retire: BMO survey
Inflation is carving away at Canadians’ retirement nest eggs, a new BMO survey has found – making it harder to reach the $1.54 million savings target they think they’ll need.
A Yahoo! Finance article by Alicja Siekierska breaks down this and the other results of BMO’s research.
“According to BMO’s annual retirement survey of 1,500 Canadians, 76 per cent of respondents are worried they won’t have enough money in retirement due to rising prices. Another 63 per cent of Canadians say rising prices over the last year have hampered their ability to save for retirement,” she writes.
What are savers doing to offset inflation?
They have, the article notes, begun “cutting other spending,” or saving less for retirement. Other strategies include planning to work longer – or to “put off retirement savings completely,” Yahoo! Finance reports.
“Inflation is a major concern for Canadians, and the spike in prices as the economy emerged from the pandemic is a stark reminder rising prices can affect spending, investment and savings plans,” states Robert Kavcic, senior economist at BMO, in the article.
“Inflation should always be a major consideration when saving and investing for retirement and if investors have concerns about how rising prices may impact their retirement savings, it might help to seek guidance from a financial professional,” he tells Yahoo! Finance.
The $1.54 million Canadians think they need to save is down from last year’s survey, where Canadians estimated they would need $1.7 million, the article notes.
And, despite inflationary pressures, the article points out that average registered retirement savings plan (RRSP) contributions have gone up, “rising 14 per cent over last year to $7,447. That’s also above the average contribution record of $6,822 set in 2021, when the COVID-19 pandemic saw savings rates go up.”
What can we do to offset the impacts of inflation, so we can keep saving for retirement?
According to an article from The Punch, there are a number of possible strategies.
Focus, the article suggests, on “priority” expenses and see if you can cut non-priority spending. Stick to a budget, the writers suggest. Save on transport costs by using public transport, The Punch continues, and consider additional streams of income such as “freelance work, taking up part-time jobs, monetizing skills, or venturing into a small-scale business.”
Be efficient with the energy you use, the article concludes, reduce dining out, and “haggle” for lower prices.
If you can keep a stream of retirement savings dollars going into your nest egg, your future you will thank you profusely. And if you are saving on your own for retirement, consider partnering-up with the Saskatchewan Pension Plan. SPP offers professional money management at a low cost – your savings dollars will be invested in a diversified, pooled fund. When it’s time to give back your ID badge, your SPP retirement income options include a lifetime monthly annuity payment, or the more flexible Variable Benefit.
Check out SPP today!
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Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.
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