Pandemic’s a worry for Canadians, and impacting their ability to save: survey
New research from CIBC and Maru/Blue finds that 40 per cent of Canucks are worried about how the pandemic will affect “their retirement and savings plans,” reports Wealth Professional.
Also alarming – 23 per cent of those surveyed have “been unable to contribute to their retirement plans since the pandemic began,” the magazine reports.
There are also subtle additional ways the pandemic may impact future retirements, Wealth Professional notes, again citing the survey’s findings. Thirty per cent of Canadians surveyed believe they will have to work longer than they originally had planned, and 32 per cent don’t think they’ll do as much travelling in retirement as they had hoped, the magazine reports.
This level of pessimism around retirement has not been seen since 2014, the article adds.
Other learnings from the pandemic include:
- 20 per cent say they are paying more attention to their personal finances
- 21 per cent say they “won’t panic when markets become volatile”
- 19 per cent agree it is “important to save for retirement/their future”
- 26 per cent feel the pandemic has “significantly increased the cost of retiring”
- 24 per cent now feel they can live with less and will reduce discretionary spending
The amount needed for a comfortable retirement is, according to Wealth Professional, “10.9 times their final pay to maintain the same spendable income after retirement.” The magazine cites findings from actuarial firm Aon for this figure.
These figures are certainly not surprising. Many Canadians have had their income slashed, are receiving benefits, and have deferred repayment of mortgages as we all try to tough out the pandemic.
It’s encouraging that nearly 20 per cent of us – despite being downtrodden by the pandemic – still see the value of setting aside whatever they can today to benefit themselves in the future.
Another part of the equation, of course, is living on the retirement savings – the so-called decumulation side, where all the money you’ve piled up is turned into what you live on in retirement.
According to Benefits Canada, Canadians need to think about how to make their retirement income last.
“We’ve had a number of tax rules and pension rules based on the age of 65 and that made a lot of sense years ago, but the issue is now, once you hit 65, you can live to 87 or even longer,” states economist Jack Mintz of the University of Calgary in the article.
“I think we need to allow people to put more money in tax-sheltered savings. I would like to see an increase in pension limits and [tax-free savings account] limits in order to help people save more for the future. I’d also like to see more rules around [registered retirement income funds], when you have to withdraw money out of your retirement accounts… to provide more flexibility,” Mintz states in the article.
These are solid ideas for making retirement savings last longer, and for helping Canadians accumulate even more savings than they have at present. If you are looking for a place to stash cash for your retirement future – a place where your savings will be professionally invested at a very low rate – look no further than the Saskatchewan Pension Plan (SPP). The SPP has an impressive rate of return of nearly eight per cent since its launch nearly 35 years ago. And if money is tight today, you can start small and gear up when better times return. Take the time to click over and check them out.
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.