As a society, we are inundated with advertising on TV, social media and traditional newspapers that urge us all to save for retirement. We see a similar number of headlines, tweets and news items warning us that Canadians have record levels of household debt.

We are told to save for retirement, but also to pay off our debts. Is there a correct answer to the question of which comes first, retirement saving or debt reduction? Save with SPP clicked around to see what people are saying about this topic.

CTV British Columbia notes that the question for any leftover money at the end of the month is typically “spend it or save it.”

In the CTV report, Penny Wang of Consumer Reports proposes doing both. “It’s difficult to tackle two financial goals at once, but if you take a two-pronged approach, you can save for retirement and pay down your debt at the same time,” she tells the broadcaster.

Wang says you need to start by creating a basic budget to see where your money is going. This can help free up more for debt reduction and saving, she advises. Make your own coffee and cook at home, she suggests.

Take that extra money and put some on debt, targeting “high interest debt like credit cards first,” and lower interest debt later. For long-term savings, the article suggests setting up some sort of automatic withdrawal plan so the cash is gone before you have time to spend it.

The MoneyTalks News blog comes down a little more on the side of retirement saving.

“While living debt-free is a great goal, accumulating a pile of cash is critical, especially for those approaching retirement,” states MoneyTalks News founder Stacy Johnson in the article.

Debts like mortgages, he explains, can be dealt with by selling off your house and renting, but when you are entering retirement, “cash is king.”

He advises people to save “as much as possible” inside and outside retirement accounts, and once a “comfortable cushion” is achieved, you can turn your attention to putting extra money on debt, including mortgages.

So let’s put this together. At a time when the pandemic has many of us off work and/or receiving government help, we’re dealing with two problems – high household debt and low retirement savings. We know how much debt we have. According to the Motley Fool blog notes the following:

“To understand whether your registered retirement savings plan (RRSP) measures up, it helps to look at how other Canadians are doing with theirs. There are ample studies out there to help you find that out. One such study from the Bank of Montreal revealed the average Canadian’s RRSP balance.

The amount? $101,155.

At an average portfolio yield of 3.5%, that pays about $3,500 a year.

A nice income supplement, but nothing you can retire on.

Clearly, you’ll need more than that to retire comfortably. The question is, how much more?”

So, for those of us with debt, and without sufficient retirement savings, any road will take us to Rome. Whether you decide to save for retirement first and deal with debt later, or go with the two-pronged approach, succeeding in managing debt and growing savings will deliver you a lot more security once you’re retired.

If you’re in the market for a retirement savings plan, you may want to consider the Saskatchewan Pension Plan (SPP). The SPP allows you to contribute in many different ways – you can have money directly transferred from your bank account on a monthly basis, or you can set up SPP as an online bill and transfer in money now and then. That flexibility can help you ratchet up savings even as you chip away at debt.

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