Are Canadians getting sidetracked in their retirement savings efforts?
What’s something that you begin to think about for the first time in your 20s and 30s, and begin to worry about once you’re in your 60s?
No, it’s not growing old. According to new research from Franklin Templeton, reported upon in Wealth Professional, that multi-decade preoccupation is saving for retirement.
Franklin Templeton’s Retirement Income Strategies & Expectations (RISE) research found that 79 per cent of Canadians “believe someone should start saving for retirement by the time they’re 30 years old,” the magazine reports. But only about half of those surveyed – 41 per cent – said they did start saving at that age, Wealth Professional reports.
“Looking at the top three financial priorities reported by each participating age group, the survey showed that retirement saving is a top objective among those in their 30s, and it remains as a primary consideration for people up to their 60s,” the magazine explains.
So what’s getting in the way of retirement saving?
According to the survey, “one-third said they fell short because they had to prioritize debt repayment, and one-fourth blamed their shortfall on an unexpected life event or expense.”
Right up there with retirement saving as chief concerns – in all age groups – were “paying off unsecured debt” and “having sufficient savings to cover unexpected expenses,” the survey data shows.
So if Canadians generally aren’t able to save much for retirement, how do they think the golden years will work out?
Even though three-quarters of those surveyed were “confident” about retirement, 73 per cent expressed concern “about potentially outliving their savings,” and 48 per cent admit they have yet to develop a retirement plan.
Without plans or savings, it’s not surprising to learn that Canadians – 42 per cent – expect to have a “later than expected” retirement, Wealth Professional notes. What the magazine did find surprising was that retirees polled expressed “regret at not having saved more” (56 per cent) and noted their expenses had actually gone up in retirement (61 per cent).
The Cole’s Notes version of this is quite simple. We all think we should start saving regularly while we’re young, but then find we can’t or don’t. And when we’re older, we regret that decision. So why not make saving the new “not saving?”
Like any big project, saving for retirement can sound intimidating. Who can suddenly put some high percentage of take-home income away in a retirement savings account? A trick that works is to start small. Can you afford to save $5 a week? Start there. Down the road, when you can, increase it, maybe to $10. Be sure that your savings are automatically withdrawn from your bank account so you don’t accidentally crack into the money. Make it automatic, keep increasing the contributions, and over time, savings will start to pile up. You can use an automated approach with the Saskatchewan Pension Plan.
You can also set up your SPP account in the “bill payments” area of your bank account, and then transfer any cash left over following bill payments to your plan. SPP will quietly and efficiently grow your money over time, and when it’s time to hit the parachute and escape from work, your SPP pension will be ready to provide you income for life via a choice of annuity options. Be sure to check them out today!
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.