JUN 27: BEST FROM THE BLOGOSPHEREJune 27, 2022
Is inflation throwing a wrench in peoples’ retirement plans?
An article from Kelowna, B.C.’s Castanet site suggests that inflation is making older Canadians hit the pause button on their retirement plans.
The article cites a study commissioned by Bromwich+Smith and Advisorsavvy that found “54 per cent of older Canadians have put off retirement this year because of increases in the cost of living.”
Other results from the study, administered by polling firm Angus Reid, were equally eye-opening.
Four in 10 older Canadians “have delayed, or plan to delay, their retirement because they have too much debt, while 62 per cent have delayed retirement because they don’t have enough savings or investments,” the article notes.
And there are other reasons for delaying retirement, the survey found.
Twenty-six per cent said they are still supporting adult children. Twenty-three per cent “love my job too much to quit,” the article reports, with 21 per cent not wanting to retire due to the still with us (but hopefully going away) COVID-19 pandemic, Castanet reports.
Other reasons for delaying retirement including taking care of a spouse (13 per cent) or other family member (10 per cent), the article notes.
“Canadians are all feeling a bit exhausted from the last two years, between multiple waves of COVID-19 and a tattered economy,” states Laurie Campbell of Bromwich+Smith in the article. “For those close to retirement, 2022 might seem like the best year to do so. But with inflation still high and bank accounts and retirement savings being depleted, it might be wise to ask yourself, can I retire in 2022?”
Perhaps the most alarming stat in the article is this one – “63 per cent of survey respondents were worried about never being able to retire.”
Other concerns were the fear of running out of money in retirement (71 per cent), as well as the worry of having to go back to work after retirement (24 per cent).
“The results of the survey are somewhat dispiriting,” states Advisorsavvy founder Solomon Amos in the article. “There have been economic shocks throughout time, but the last couple years have tested many people, and put the importance of proper retirement planning into plain view.”
Finally, while “almost a quarter” of Canadians surveyed hope their homes will fund part of their retirement, those homes are now carrying quite a cost due to the combination of already-high home prices and rising mortgage rates. Twenty per cent of those surveyed (aged 18 to 34) are spending “50 to 74 per cent of their income on mortgage payments alone.”
If you don’t have a retirement program at work, it’s up to you to save for your retirement – and that can be difficult when the cost of everything seems to be going up. But there’s a solution.
The Saskatchewan Pension Plan is a full service defined contribution pension plan that’s open to every Canadian with registered retirement savings plan room. You can arrange to make pre-authorized contributions to SPP, perhaps coinciding with your payday, so that you are paying your future self first.
SPP will invest those savings for you in a pooled fund, professionally managed at a low cost. And if you are worried about running out of money when you retire, SPP gives you the option of receiving a lifetime monthly annuity payment from some or all of your SPP savings.
If you know you should be doing something about retirement savings, but haven’t had the time, get in touch with SPP and they will help you get going on a program tailored to your requirements.
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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.