What is the leading advice Canadian retirees would offer to working Canadians who expect to retire in their 60s? Start saving now.
Results from the TD Retirement Realities Poll indicate that 69% of current Canadian retirees say that, in hindsight, they wish they’d saved for retirement for 25 years or more. The poll found that 15% of current working Canadians plan to save for only five years or less before retiring. Additionally, 9% said they will save for less than five years, and 6% said they don’t plan to actively save for retirement at all.
“If working Canadians don’t make retirement savings a priority, day-to-day expenses and more immediate financial needs can pre-empt saving for the future. Don’t get caught 30 years from now saying, ‘I wish I had started saving sooner,’” says Kim Parlee, vice- president with TD Wealth Management. “When you start investing early, the impact of compound interest is more powerful in helping your savings grow.”
About two-thirds (64%) of working Canadians polled expect to retire in their 60s, with 28% targeting their early 60s and 36% after 65; 16% think they will keep working into their 70s. By contrast, 36% of the retirees polled said they stopped full-time work in their late 50s, while one in four left the workforce in their early 60s. Just 3% said they continued to work into their 70s.
Asked to give current working Canadians a piece of advice around planning for retirement, 52% of retirees polled suggested planning to save more by creating a budget and sticking to it. They also advised contributing the maximum amount to your RRSP each year (44%) and paying off all debts before retiring (43%).
“Working longer and focusing on setting money aside for retirement at the end of your career can help bolster your savings. However, you can get much more out of your investment dollars when you contribute to savings early in your earning years and continue to do so regularly throughout your working life,” says Cynthia Caskey, vice-president, portfolio manager and sales manager with TD Waterhouse Private Investment Advice.