Nearly half (46 per cent) of working Canadians believe they’ll have to work longer than they’d planned five years ago as a result of not saving enough, according to a new survey by the Canadian Payroll Association.
The survey, which polled nearly 5,000 Canadian employees, found 74 per cent have saved only a quarter or less of what they feel they’ll need to retire. Among those closer to retirement (aged 50 or older), 47 per cent are still less than a quarter of the way to their retirement savings goal. The average target retirement age is about 61, according to the survey, and 46 per cent of respondents think they’ll need a retirement nest egg of at least $1 million.
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The survey also found 47 per cent of respondents would find it difficult to meet their financial obligations if their paycheque was late by even a single week. The numbers are even higher for millennials in their 30s (55 per cent would have difficulty) and people in their 40s (51 per cent). Some 41 per cent of respondents spend all of or more than their net pay.
When it comes to savings, 42 per cent of survey respondents put away five per cent or less of their earnings. Nearly one in four (22 per cent) couldn’t come up with $2,000 within a month for an emergency expense.
Despite their precarious financial situations, 26 per cent of respondents feel earning more is their best way to financial well-being, compared to just 19 per cent who think spending less is the ticket to financial security.
“These results underscore the need for spending less and saving more every day, for emergencies and for retirement,” says Janice MacLellan, the Canadian Payroll Association’s vice-president of operations. “They also show that it is very difficult for people to change or reduce their spending patterns.”
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