New data from RBC suggests Canadians between the ages of 18 and 54 are concerned about the effect that family priorities will have on their ability to save for retirement.
The 23rd annual RBC RRSP Poll finds that 48% fear that saving for their children’s education will take a toll on their savings, while 36% point to taking care of aging parents as a worrisome financial burden. More than half (57%) said their parents’ retirement experience has shaped what they expect from their own retirement.
“While Canadians may see their parents’ retirement experience as a model for what to expect, the reality is that their retirement may not be the same, particularly if they are part of the sandwich generation with both aging parents and school age children,” said Amalia Costa, head, Retirement Strategies, RBC. “Canadians know that juggling competing financial priorities creates enormous strain on both time and money.”
Adding to the retirement worries for current working Canadians is the fact that just 26% of those polled expect an employer-sponsored pension to be their primary source of income in retirement and fewer than one in five (18%) of those individuals have a DB plan.
Costa offers the following tips to help Canadians approach saving:
- Look for hidden sources of contribution funds. If you have debt, take advantage of lower interest rates to reduce overall borrowing costs and free up some monthly cash flow. For example, consolidate higher interest credit card balances into a loan or home equity line with a lower interest rate.
- Get into the good savings habit of paying yourself first by setting up an automatic contribution plan to coincide with your payroll deposit. The funds will come off the top and are often not missed.
- If you are within a few years of retirement, focus on establishing a retirement income plan. Translate your vision for the lifestyle you want in your retirement into financial requirements and find out how different sources of retirement income can fund your new lifestyle.