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!

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Looking for ways farmers can thrive in retirement

Writing in Country Guide, Helen Lammers-Helps notes that farmers have some unique challenges when it’s time to park the tractor for the last time.

“For many farmers, being a farmer is part of their fundamental nature. It’s who they are and they can’t imagine a time when they won’t be a farmer. Who hasn’t heard a farmer say they want to die farming,” she writes.

However, she continues, the day will come when farmers have to exit the vocation they love.

They may need to retire “for health reasons, to make room for the next generation,” or to fulfill a promise to a spouse that they would “slow down,” or for financial reasons, explains Lammers-Helps.

But even an unexpected exit from farming can be managed – with a little advance planning, the article suggests.

“The good news is that each of us has been through many life transitions, and with some effort to plan to use the supports and resources available, the post-farming years can actually be looked forward to with anticipation,” she continues.

The article quotes Waterloo, Ont.-based psychotherapist Chad Bouma as saying there is no “one-size fits all” strategy to assist farmers in retiring. Help from accountants and lawyers, he tells Country Guide, will help them with the complexity of leaving the farming business and (if applicable) dealing with succession planning.

There’s also the change in routines, perhaps after many decades of farming, the article notes.

Burlington, Ont.-based grief and trauma therapist Selena Jones tells Country Guide that “while retirement can initially bring relief, she has noticed the loss of routine leaves some people feeling anxious and listless, which can manifest as sleep difficulties, frustration, irritability and anger.”

She says the retiring farmer needs to focus on next steps.

 “Pay attention to what sparks your interest but also what you know you don’t want to do. Think about what you liked to do when you were younger. Make note of what you’d like to explore when you have more time,” she states in the article.

As well, she suggests people think about what gives them a sense of purpose and fulfillment beyond farming, the article notes.

“Is it being more involved in their community or have they been so involved that they need to take a step back? What do they need to feel like they are in equilibrium,” she asks in the article.

Be open, she tells Country Guide, to “trying a new hobby or checking out a new group.” She urges retirees to “have fun with it. It can open the door to something we had no idea we’d enjoy,” she adds.

Social connections are “incredibly vital,” she notes, saying retirement offers more time to spend with “nieces, nephews, and grandchildren, or to nurture old friendships.” Mentoring younger farmers is another way to find purpose in your life after farming, the article adds.

The article concludes by saying that it’s all right to reach out for help if your retirement from farming is not working out for you – there are plenty of resources to help. “We can’t always do it on our own – and we don’t have to,” notes Jones.

If you are self-employed, you are in charge of your own retirement savings plan. If you find the idea of investing daunting, consider joining the Saskatchewan Pension Plan, a do-it-yourself retirement system open to any Canadian with registered retirement savings plan room. SPP will look after the investing for you, growing your savings in SPP’s low-cost, professionally managed pooled fund. And when it’s time to retire, you can opt for the security of a lifetime monthly annuity payment, or the flexibility of SPP’s Variable Benefit.

Check out SPP today!

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Fourteen per cent of Canadians over 65 have “poverty-level” living standard: NIA

A new study from the National Institute on Ageing (NIA) suggests a sizeable number of Canadian seniors have a “poverty-level” living standard.

The NIA’s findings were the subject of a Wealth Professional article recently, written by Steve Randall.

The article notes that our aging citizens are “facing challenging times, with many dogged by poor finances, weak social connections, and a lack of retirement savings.”

The NIA study, the article continues, found three “key areas of concern” for over 50s in Canada, including “well-being, financial security and health.”

Only 32 per cent of those surveyed reported having strong social connections, with 36 saying their connections are weak, the article reports.

“While 39 per cent of respondents said they engage in social and recreational activities at least weekly, those with poor finances are more likely to be among the 20 per cent who said they engage in these activities only once a month or the 23 per cent who do so rarely,” Wealth Professional reports.

The research indicated that “long-term financial security” among Canadians over 50 was also pretty weak, the article continues.

“Just one in three think they will be able to retire when they want to, with one in four having just $5,000 or less saved, despite working,” the article reports.

A startling finding, Wealth Professional reports, is that “a new measure called the Material Deprivation Index reveals that one in five older Canadians has a poverty-level standard of living including 14 per cent of over 65s.”

A quarter of those surveyed said “their income is not enough for their current or long-term needs, especially among 50-64s without a workplace pension and those with fair or poor health.”

While most of the respondents said they were able to access healthcare, only 48 per cent of those “who said they need home-based services were able to access them,” the article adds. A whopping 80 per cent want to “age in their own home,” with only three per cent showing a preference for moving into a long-term care facility, Wealth Professional notes.

“As Canada’s population ages, this research underscores the urgent need for bold, evidence-based action to combat ageism, strengthen financial security and ensure equitable access to health and social supports. Now is the time for policymakers and communities to come together to build a Canada where older adults feel valued, included, supported and better prepared to age with confidence,” NIA’s Alyssa Brierly tells Wealth Professional.

Last year, the plight of seniors facing a low-income retirement was covered off in an interview Save with SPP did with B.C.’s Carole Fawcett, one of the backers of the Tin Cup lobby group. You can see that article on their website here.

The research suggests that those without a workplace pension plan tend to have more income problems than those who do.

If you can join a retirement savings plan at work, be sure to sign up and contribute to the max. If there isn’t such a plan at your workplace, no problem – you can join the Saskatchewan Pension Plan, a voluntary defined contribution plan that’s open to any Canadian with registered retirement savings plan room. With SPP, you decide how much you want to contribute, and SPP can do the rest. You can automate your contributions, which will then be invested in the low-cost, professionally managed, pooled SPP fund. At retirement, you can opt for the security of a lifetime monthly annuity payment, or the more flexible Variable Benefit plan.

Check out SPP today!

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Retirement savers can do a big “catch up” in their 50s

By the time you’ve reached your 50s, the kids are usually fully educated and gone from the back room, your mortgage is close to paid off, and you’re making the most you ever have – a perfect time to catch up on those neglected retirement savings.

Writing for Money Canada, Romana King takes a look at the “catch up” years – your 50s.

“According to a data report released by Money.ca, the average retirement savings for Canadians aged 55 to 64 is $833,696 — a significant increase compared to the $183,067 saved by those in the 45 to 54 age range,” she writes. “This sharp rise suggests that many Canadians focus heavily on increasing their retirement contributions in their 50s in an effort to close the gap before they retire,” she continues.

So, she explains, if you haven’t actually got around to retirement saving and you have hit the big 5-0, don’t get stressed. “If you’ve fallen behind on your retirement savings, don’t panic — there’s still time to make meaningful progress towards this goal,” she notes, reassuringly.

Her article shows a recent social media post by a 49-year-old woman who confesses that she is “almost 49 and I have zero retirement savings. No exaggeration. Absolutely nothing…. And I know I can’t be the only one.”

It’s not a surprise, continues King, that those among us who are middle-aged aren’t finding a lot of spare dollars to tuck away for their golden years.

“Many middle-aged Canadians report feeling unprepared, often due to competing financial responsibilities such as mortgages, children’s education, and daily expenses. A survey by YouGov found that only 19 per cent of Canadians aged 35 to 54 feel confident in their retirement savings, compared to 26 per cent of those over 55. This growing concern underscores the need for proactive financial planning, even for those who feel behind in their savings journey,” she adds.

So how to catch up? Take a look at how much room you have in your registered retirement savings plan (RRSP) or Tax Free Savings Account (TFSA), she advises. If you haven’t been contributing, you may have quite a lot of room in either of these savings vehicles, she explains.

Next, make savings automatic.

“Automate contributions to your RRSP, TFSA, or other savings accounts to ensure that you’re putting aside money regularly. Payroll deductions or pre-authorized transfers make it easier to stay disciplined,” she writes.

Consider meeting with a financial adviser to “maximize investment returns” through balancing your portfolio “between high- and low-risk assets,” taking advantage of tax-efficient savings vehicles, and looking at adding “dividend-paying stocks, mutual funds, or bonds that align with your risk tolerance and retirement timeline.”

Have you calculated when you think you want to retire, and how much you’ll get from government or company retirement programs? King says this is a crucial bit of research to carry out.

As well, in your high-earning 50s, it’s time to “pay off high-interest debt” and consider “downsizing or simplifying living arrangements,” she continues.

If it doesn’t look like you’ll have saved enough by your chosen retirement date, consider working longer, or part time, or developing a “side hustle,” she suggests. If you find yourself retiring after age 65, you can delay the start of your Canada Pension Plan and Old Age Security payments, increasing what you’ll get per month.

“Catching up on retirement savings in your 50s is not just possible — it’s achievable with a well-thought-out plan. By taking advantage of tax-advantaged accounts, reducing debt, optimizing investments and boosting income where possible, you can bridge the gap and retire comfortably. Remember, the best time to start was yesterday, but the next best time is today,” she concludes.

The Saskatchewan Pension Plan is an invaluable partner for your retirement savings. SPP’s Balanced Fund features exposure to Canadian and international equities, fixed income, real estate, and more – all provided via a low-fee, professionally managed, pooled fund. If you want to make your contributions automatic, SPP can do that, via pre-authorized contributions from your bank account that can coincide with payday.

Check out SPP today!

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Serious illness not factored into many Britons’ retirement plans: study

One of the unfortunate possible side effects of having a longer lifespan could be that you will develop a condition that will require long-term care.

Yet in the U.K., only about one-fifth of retirement savers (19 per cent) are factoring that possibility into their savings plans, reports Zoe Wickens of Employee Benefits.

She writes that research from Barnett Waddingham found that “25 per cent of respondents under the age of 50 have prepared for this possibility, compared to just 16 per cent of those aged over 50. Two-fifths (43 per cent) of this older age group have thought about it but not included it in their retirement planning, and 32 per cent have not considered it at all.”

In fact, she continues, only 17 per cent of respondents to the survey have “considered the possibility of having to go into care.” A surprising 39 per cent of respondents say they thought about it but did not factor it into their plans, and 35 per cent “have not considered it at all.”

Interestingly, while 21 per cent of respondents “have fully planned for their children needing urgent financial support during their retirement,” only 12 per cent are planning to provide financial support to parents during retirement.

Barnett Waddingham’s Mark Futcher states in the article that “poor planning is almost as bad as not saving. The evidence shows we’re at risk of waving goodbye to a lost generation of retirees, cut adrift by insufficient planning, a myopic attitude to the harsh realities of financial shocks, and an unwillingness or inability to ask for help.”

“The industry needs to urgently engage and educate people, especially those in their 50s and above,” he continues. “It’s not just about instilling in them the importance of planning but about making sure they have the necessary tools to do so and a true understanding of the hurdles ahead and their familial financial ecosystem.”

He concludes by recommending people look for professional advice in their retirement planning and saving.

Are you the owner of a business, looking for ways to attract and retain good employees? Having a company pension plan is one of those ways, and the Saskatchewan Pension Plan makes it easy for you, the employer, to offer SPP as your firm’s pension plan. SPP will handle the lion’s share of administration once the plan is set up, including providing your employees with tax slips, annual statements and all benefit-related communication.

Check out SPP today!

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Are annuities making a comeback?

More and more defined contribution (DC) pension plans in the U.S. are seeing an old retirement staple – the annuity – as a way to meet “the rising demand for lifetime income products” within those plans.

According to an article by Leo Almazora in Investment News, research from TIAA, who surveyed “insights gleaned from 500 C-suite decision makers” sponsoring DC plans, 76 per cent feel interest in annuities will grow over the next five years.

For background, a DC plan (like the Saskatchewan Pension Plan) is the type of retirement savings program where what goes into the plan, in terms of contributions, is what’s defined.

At retirement, the job is to turn a lump sum of money into an income stream.

An annuity is a way to turn a lump sum into a guaranteed income stream. You can’t run out of retirement savings with an annuity; you’ll get a payment – typically on the first of the month – for each month of your retired life.

Almazora notes that “among sponsors who do not currently offer an annuity, more than 40 per cent say they plan to introduce one within two years.”

There is one problem, however, the article notes – understanding what an annuity is and how it works and then explaining it all to plan members.

“Even though the interest in lifetime income solutions is real, the report points to a lack of `annuity fluency’ as a potential challenge, with only 37 per cent of respondents feeling confident in explaining the value and importance of these products,” the article explains.

Kourtney Gibson of TIAA tells Investment News that DC plans are on the rise in the U.S. due to the decline of traditional defined benefit (DB) pension plans. With a DB plan, the amount a member will receive in retirement each month, for life, is what’s defined.

“Now, with growing uncertainty around Social Security and people living longer lives, we need to help people manage their savings to last through retirement,” Gibson states in the article.

A whopping 85 per cent of the DC plan sponsors surveyed felt that “employees require guaranteed income beyond Social Security,” but 43 per cent feel that understanding how an annuity works and explaining it will require help – perhaps via consultants – to boost adoption.

Members of the Saskatchewan Pension Plan already have the option our U.S. DC friends are thinking about. Members can convert some or all their account balance to an annuity when they retire. With an annuity, you will get a lifetime, guaranteed monthly payment for as long as you live. And SPP’s stable of annuity products includes options that can provide benefits for your surviving spouse.

Check out SPP today!

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In the U.S., retiring women wish they’d saved more

A study south of the border has found that half of retired women are finding life after work more expensive than expected – with 63 per cent of them wishing they had started saving earlier.

The study from Corebridge Financial is covered by writer Trina Paul for Investopedia.

“Half of the women surveyed in a recent study by Corebridge Financial said that retirement was more expensive than they had anticipated, while just under half said that they retired earlier than they expected,” she writes.

An earlier than expected retirement, she notes, can mean “retirees have insufficient savings” and are forced to take government retirement benefits (here in Canada, this would be the Canada Pension Plan and Old Age Security) earlier than planned, leading to “lower monthly cheques.” And, the article continues, “since women have longer life expectancies than men, they may need more in retirement savings or make their dollars stretch for longer.”

These realities point out the need for a solid retirement savings plan, states Terri Fiedler of Corebridge Financial in the article.

“Women are both starting retirement earlier than expected and managing costs that are higher than anticipated. These dual challenges point to the importance of creating an action plan early in your working years that can help you both build your retirement savings and make them last throughout your retirement,” Fiedler tells Investopedia.

As noted, nearly two-thirds of the retired women surveyed say they now wished they’d started saving for retirement earlier, the article notes. As well, “40 per cent said they didn’t start to prioritize retirement until they were age 41 or older,” the article continues.

The earlier you start saving, the better, notes the article.

“Since investors benefit from the power of compound interest, those who start saving for retirement earlier in life may not need to invest as aggressively as those who start later. In fact, nearly one-third (31 per cent) of retired women surveyed said that, when they were working, they wished they had contributed more from each paycheque into a retirement plan,” the article notes.

The article concludes by pointing out that good workplace pension plans are not easy to find these days.

“While more workers could rely on pensions in the past, the responsibility of saving for retirement has largely fallen on individuals. One-third (33 per cent) of retired women said they had a pension versus nine per cent of non-retired women who said they had one,” the article concludes.

If you are among the fortunate people who have any kind of retirement arrangement through work, be sure to join up as soon as you can and contribute as much as possible.

If you don’t have a plan to join, don’t worry – any Canadian with registered retirement savings plan (RRSP) room can join the Saskatchewan Pension Plan. You decide what you’d like to contribute, and we’ll do the rest, investing your savings in a low-cost, professionally managed pooled fund. At retirement, you’ll have choices on how to turn savings into income, such as SPP’s lifetime monthly annuity payment options or the more flexible Variable Benefit.

Check out SPP today!

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Is America “doing retirement all wrong?”

Writing for Business Insider, Hannah Seo suggests two problems – not saving enough, and not making use of all the time – mean Americans are doing retirement “all wrong.”

Many of us think that retirement means a time “of endless leisure and zero responsibility,” reading, golfing, and binge-watching TV, but there are other factors at play, she writes. Americans aged 65 to 74 spend an impressive average of seven hours a day on leisure (including four hours of TV watching), which is getting close to twice as much time as adults aged 25 to 54.

However, this sedentary lifestyle “is associated with earlier death,” she continues. People are also living “15 years longer than they did 100 years ago,” meaning retirement is growing into a much longer segment of one’s overall life – decades.

“While there’s much handwringing over how to save up enough money to enjoy those work-free years, much less discussed is how we should spend those years. More and more research is finding that both physical and social activity are crucial for well-being in old age — they keep people happier and living longer,” Seo explains.

“But that’s not what most people are doing. Americans are doing retirement all wrong,” she contends.

The fact that we are all working longer and living longer creates a couple of problems – “how to pay for a longer retirement, and how to spend their time.”

Research from the Center for Retirement Research at Boston College has found that one solution to both problems is simply to work longer, the article continues. In the U.S., the piece continues, more folks are working later into their lives and claiming their government retirement benefits (here in Canada, this would be things like the Canada Pension Plan and/or Old Age Security) while still working.

“Of Americans 65 and older, nearly 11 million, or about 19 per cent, are employed, and that number is projected to rise to nearly 15 million by 2032. Twenty years ago, just under five million Americans over 65 were employed,” she writes.

Why keep working? Work, the article explains, “fulfills a lot of needs that people don’t know how to get elsewhere, including relationships, learning, identity, direction, stability, and a sense of order.” The article goes on to note that research by Mass Mutual found that one-third of new retirees reported becoming “unhappier” in retirement than at work, and a study by the University of Michigan links “some of the negative effects people can experience in retirement” to “lifestyle changes, such as being less active and social in the absence of work.”

If not work, what else do we need to address post-retirement blues?

A sense of purpose, the article suggests, is key.

Virginia-based retirement coach Dee Cascio tells Business Insider that the transition from work to retirement is not “a piece of cake” and can be “like jumping off a cliff.”

“Cascio has found that when helping clients bring purpose back into their lives in retirement, it can help to think about the `six arenas of life’: work, relationships, leisure, personal growth, finances, and health. A lot of people have drawn their sense of purpose or identity from work, and they might want to continue doing so through jobs or volunteering in retirement, she says. But any of these arenas can be a source of purpose,” the article notes.

In fact, Cascio tells Business Insider, if you haven’t been taking care of your health, doing so in retirement can provide you with that sense of purpose.

Do you have a bunch of small, registered retirement savings plans here, there and everywhere? With the Saskatchewan Pension Plan, you can unite those plans into one place – the professionally managed, low-cost pooled fund run by SPP. SPP allows you to transfer any amount into your account from another non-locked in RRSP. That way you’ll have one big piggy bank working for your future instead of a host of small ones.

Check out SPP today!

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Avoid these retirement savings mistakes

A long time ago – when we were old enough to know better – this writer decided it would be a good idea to dip into our registered retirement savings plan (RRSP) to snag a little cash to buy a brand-new desktop PC.

There was a withholding tax added on to the withdrawal, which was bad, and then the amount withdrawn added to our taxable income, which was like a double hit. Ouch. Lesson learned.

A recent article from Business Insider rhymes off a number of other regrets that a group of Americans aged 48 to 90 have about their retirement savings plans.

“Some wish they’d hired a financial advisor, while others regretted expensive purchases. Others said they took Social Security too early or retired without a long-term financial plan,” the article notes.

Gary Hayes of California tells Business Insider that one of his main regrets is “not saving at least 10 per cent of his income each month.” He admitted to being “too liberal” with spending throughout his life and having invested in short-term ideas rather than longer-term investments.

“You can’t expect that you’re all of a sudden going to win the lottery,” Hayes, who receives $1,846 a month in Social Security and lives in government-subsidized housing, tells Business Insider. “You can’t expect that someone’s going to pass and leave you an inheritance that will make your life more comfortable.”

Cleveland’s Nancy Seeger tells Business Insider “she wished she could have saved more when her children were young,” since she didn’t really start saving for retirement until her 50s.

PJ White, 69, regrets not putting money into a registered retirement savings vehicle. Looking back, the homeless senior realizes she spent too much “on leisure and clothes – play money — and did not set aside time to learn about investing.”

She and her partner lost their home due to tax arrears; they live in a tent and are fighting to get their house back.

“The money would come in and out it would go,” White said, adding she rarely put money into her 401(k), which is similar to an RRSP. “I didn’t think about the retirement aspect because it was so far down the road, but here I am now wishing that I had.”

The article concludes by saying that any retirement savings will help you later in life.

“Bank of America’s Financial Wellness Tracker suggests that Americans ages 61 to 64 should have about 8.5 times their current salary in savings. Someone with $1 million in savings at 65 can safely withdraw $40,000 in their first year of retirement,” the article states.

“For some, saving just one per cent more could have significant financial rewards down the line. If someone making $50,000 annually contributes five per cent of their salary to retirement, they would save nearly $60,000 less after 30 years than if they’d contributed six per cent,” the article concludes.

If you haven’t had time to get going on your retirement savings, and/or don’t know much about investing, a solution is at hand. The Saskatchewan Pension Plan is an open, voluntary defined contribution pension plan that any Canadian with RRSP room can join.

You decide how much to contribute – you can make contributions automatic by signing up for pre-authorized withdrawals from your bank account – and SPP does all the rest, investing your savings in a professionally managed, low-cost pooled fund with an enviable track record. When it’s time to retire, you can choose from options like a lifetime monthly annuity payment or the more flexible Variable Benefit.

Get SPP working for you!

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Nearly one third of Canadians have no retirement savings

A fact-filled article by Nicole Blair for the Made in CA blog reveals some statistics – some positive, others a bit grim – about the retirement savings and income habits of Canadians.

She starts by posing this classic question – “have I saved enough money to retire comfortably?”

It’s a hard one to answer, but let’s dive into this well-researched piece.

Last year, she writes, 6.2 million Canadians received Canada Pension Plan payments. The average amount received, including Old Age Security, was $15,159, she continues.

She then looks at the main retirement savings vehicle in this country, the registered retirement savings plan (RRSP).

“Canadians,” she writes, “should save between $700,000 and $1 million for their retirement.” She later adds that you should save enough to replace 80 per cent of your “current spending… to maintain your current lifestyle once retired.”

To that end, 69 per cent of us have opened RRSP accounts. As well, she notes, “in 2019 there were over 6.4 million registered pension plans.. in Canada.”

However, not everyone has an RRSP or belongs to a workplace pension plan, and not all of us have savings, Blair notes.

“Almost a third of Canadians have not saved or thought about retirement,” she writes. “People living alone find saving for retirement harder than the average,” she continues. A total of “62 per cent of Canadians under 35 are saving for their retirement, but only one-fifth think they are on the right path to meet their goals,” she adds.

A slim “12 per cent of Generation X Canadians feel confident they will achieve their retirement saving goals,” Blair explains.

While the average amount Canadians have saved in an RRSP is an encouraging $111,922, Blair says, that figure falls short of the required amount.

“The opinion on how much you should save for your retirement varies. The average amount is around $700,000. However, some financial advisors would say $1 million is needed to retire comfortably in Canada. Of course, the amount you will need depends on where in Canada you plan to retire,” she notes.

“When calculating how much you will need, you need to consider all fixed costs as well as other expenses. Fifty-nine per cent of Canadians cannot estimate how much they would need to retire comfortably, while 50 per cent hope they will have cleared all their household debt by the time they retire,” she continues.

“A way to calculate how much you need is to take 70 per cent of your salary and multiply it by 25. The 25 represents living for 25 years after retirement. Using this formula, a person on a $60,000 yearly salary will need to save $1.05 million (70 per cent of $60,000 is $42,000, multiplied by 25 equals $1.05 million).”

This is a revealing article. The clear message that comes through is that without income from either a workplace pension plan or your personal savings, you’ll be living on a rather spartan $15,159 per year.

If you are eligible to join any kind of retirement program at your workplace, be sure to sign up and contribute at the maximum rates. If your organization doesn’t offer a pension program, consider using the Saskatchewan Pension Plan as your company’s program. SPP is open to individual members, but also organizations. Find out how SPP can help you build a strong retirement future!

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