Nov 2: BEST FROM THE BLOGOSPHERE

November 2, 2023

Is inflation killing the retirement dreams of Canadians?

Writing in The Brantford Expositor, Pamela Heaven cites new research, which suggests that while retirement security may be improving, “Canadians aren’t buying it.”

Her article looks at recent findings from the Natixis Investment Managers’ Global Retirement Index, which reported “a higher score for retirement security than the year before.”

The research, she continues, found “improved economic conditions in the most countries, including Canada, mainly in employment growth, wages gains and interest rates.”

However, writes Heaven, “Natixis research shows that this (financial) optimism is not shared by Canadians in their everyday life.”

“Saving for retirement was already a challenge. Now, as people think about the impact of higher prices, longer lives, and the potential for reduced retirement benefits, many are doubting whether they will be able to put all the pieces together,” Dave Goodsell, head of the Natixis Center for Investor Insights, tells the Expositor.

The article notes that 32 per cent of working respondents who had more than $100,000 in “investable assets” believe that “inflation is killing their dreams of retirement.”

And, the article continues, “38 per cent think it will take a miracle to retire securely, up from the 25 per cent who said the same in 2021.”

Eighty per cent of those surveyed “say that recent history has shown them how big a threat inflation is to their retirement security.” Worse, 70 per cent fear that high public debt may lead to a cut in government retirement benefits “down the road,” the article reports.

This, the article adds, may lead to “tough choices” in retirement for some of us.

“About half expect to have no option but to live frugally in retirement, 20 per cent expect they will have to work and 21 per cent expect they will have to sell their home,” the article reports.

Canada, the article concludes, is ranked 12th in Natixis’ “annual index among 44 countries,” with citizens of Norway, Switzerland, Iceland and Ireland being ranked as the top four countries for retirement security.

It’s an interesting article. There is no question that inflation can be a huge negative when it comes to retirement saving. If the price of everything is going up, it is harder to find money to tuck away for the future.

Those of us who have a pension arrangement through work are paying their future selves first. If retirement savings is deducted from each paycheque, after a while you don’t miss it and manage with what’s left.

If you don’t have a pension plan at work, don’t worry – you can join the Saskatchewan Pension Plan and set up pay yourself first automatic contributions from your bank account. You can start small, and then grow your contributions as things improve in the future. Your contributions to SPP are invested in a low-cost, professionally managed pooled fund, and will offer an important source of retirement income when the days of work life fade into memory.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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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