Canadians budgeting better, many will work past 65, research says

2020 has been a really strange time, one where we’ve lost a lot of people we care about, and have been generally beaten up financially, all thanks to the pandemic.

But a new study from the Chartered Professional Accountants of Canada (CPA), referenced by Business Insider, suggests that we Canucks are bearing up fairly well under the strain.

The study, according to a CPA news release, “shows great variations in how Canadians are coping and even succeeding during this unprecedented time.”

We seem to feel we are handling our finances well, the study reveals. Seventy-eight per cent of us believe we can “stick to a budget” and 81 per cent think we “can successfully manage our debts,” the study finds.

CPA Canada’s Doretta Thompson credits increased financial literacy for these strong numbers.

 “Providing financial literacy information is essential in these unsettled times as it can assist individuals and families in making smart decisions to successfully manage their financial wellbeing,” she says in the release.

The research shows nearly half of those surveyed – 49 per cent – have “modified their savings strategy,” with 63 per cent having savings accounts, 60 per cent with Tax-Free Savings Accounts, and 53 per cent contributing to either a Registered Retirement Savings Plan or a registered pension plan at work, the release says.

That focus on savings is important, the study notes. One in four of pre-retirement age respondents says they plan to retire in the next 25 years. Forty per cent of the pre-retirees plan to work past age 65, the release adds, and 43 per cent say they will do so because “they cannot afford to retire.”

An impressive 60 per cent of those surveyed have put aside funds for retirement in the last five years, the study found.

The pandemic has made most of us feel a bit of a pinch. The CPA survey found that 61 per cent of respondents “cut back on day-to-day spending,” and 49 per cent have developed household budgets, which 86 per cent say they are following.

“It’s encouraging to see many Canadians taking action to stay afloat during the fiscal turmoil of today but also looking to the future,” Thompson states in the media release. “Our country’s challenge is to ensure every Canadian has the knowledge and means to be financially secure.”

Personal finances, and the related issues of personal debt (or wealth) are things we Canadians don’t always like to talk about. An old saying in pension circles is that if you ask 100 people to describe a perfect wedding, you will get 100 different answers. The same is true if you ask them about a perfect retirement and how to save for it.

What the CPA is saying is that the more we know about saving, and the savings vehicles available, the more likely it is we will use them. And the more we understand debt, and how to manage it, the less debt we will all carry. It’s solid advice – educating yourself is a gift that keeps on giving.

Whether you are just starting to save for retirement, are midway to retirement, or are at its front door, the Saskatchewan Pension Plan has tools to help you. SPP invests your savings, either via contributions or transfers from other plans, and then at retirement time, can convert those savings into long-term security in the form of a monthly pension amount – for life! Why not check them out today.

Join the Wealthcare Revolution – follow SPP on Facebook!

A look at the best of the Internet, from an SPP point of view

Is retirement at age 65 priced out of most people’s range?
For decades, 65 has been the age when we are all expected to get the golden handshake. After all, it’s also the age when government pensions kick in.

But new research from Chartered Professional Accountants of Canada (CPA Canada), reported in Wealth Professional magazine, suggests many of us won’t be able to afford to hang it up at 65.

CPA Canada found a 42 per cent of working, unretired Canadians “think they will still be working past 65,” the magazine notes. Twenty per cent of respondents cited saving for retirement as “their most substantial financial concern,” with 17 per cent saying paying off debt is their top financial priority, the magazine notes.

On the plus side, 41 per cent of those surveyed think their finances will improve over the next year, reports the magazine. Forty-five per cent think things will stay the same, and 11 per cent worry their finances will get even worse, Wealth Professional notes.

Other findings noted in the article: 74 per cent of those surveyed said they save monthly, with 63 per cent having a savings account and 52 per cent having TFSA savings. Eleven per cent admitted they had no savings of any kind, the magazine noted.

CPA Canada’s Doretta Thompson, director, corporate citizenship, told Wealth Professional that while it is “welcome news” that so many Canadians feel their finances will improve, there needs to be “more financial literacy education, particularly around retirement saving and debt management.”

A final note from the article – most surveyed were concerned that rising interest rates would make it harder for them to save, as the cost of servicing their debts would go up.

It’s important to make savings automatic and regular, a “pay yourself first” scenario. An excellent way to achieve this goal is to set up automated savings with the Saskatchewan Pension Plan. You can contribute up to $6,000 a year to SPP, and you can do it at your own speed. And when you retire, SPP can help you turn those savings into a monthly income stream.

Perhaps the dream of retirement at 65 is harder than it used to be, but SPP does provide you with the tools you need to make it happen.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22