With retirement savings, you can’t always get what you want
What do Canadians expect they’ll need to save for retirement? And how are they doing when it comes to reaching that target?
Some answers can be found in a new round of research from Scotiabank, which is featured in a story in the Financial Post.
According to the news story, the average Canadian “expects to need a nest egg of $697,000 to retire.” As well, the story informs us, this same average Canuck hopes to punch the clock for the last time by age 64.
The encouraging news from this story is that 68 per cent of Canadians surveyed are saving for retirement. That’s an important start. However, the story continues, 70 per cent of them are worried “they are not saving enough.”
Other troubling findings from the research:
- just 23 per cent of those surveyed see retirement saving as a top priority, down nine points from 2017
- 66 per cent are concerned they “have underestimated how much money they will need in retirement”
- 47 per cent fear they’ll need to rely on their family for financial assistance
In a nutshell, while it’s great that more than two-thirds of us are saving for retirement, we may not be saving enough, not making retirement a “pay yourself first” must-do, and aren’t fully aware of how much we’ll need after we complete working life. That could mean looking to the kids, or very aged parents, for help.
Scotiabank’s D’Arcy McDonald tells the Post that half of those who say they aren’t saving for retirement are younger people, age 18 to 35.
“Younger people may have different priorities at this time in their lives as they strive to get momentum in their careers, pay down student loans, and save for their first homes,” McDonald states in the Post article. “The best advice we can give young Canadians is to start saving early and automate their contributions to make retirement savings an equally important part of their financial plan. The earlier you begin to make retirement savings a priority, the easier it will become.”
The article concludes by offering up this advice. All of us should know our “magic number,” or how much they need to save. This number can be calculated fairly easily if you know your other magic number – how much income you will need to have in retirement. The advice of a financial planner can help you with the math, the article concludes.
If you don’t have a retirement plan at work – or if you do, but aren’t sure it will provide enough – the Saskatchewan Pension Plan can help. You can set up automatic contributions via direct deposit; you can even make contributions with a credit card. And if money is tight at the beginning, you can start small and then ramp up your contributions whenever you get a raise. A “set it and forget it” approach will mean more retirement savings at the finish line, and less stress when you turn in your security pass for the last time.
|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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22|