More than three-quarters (79 per cent) of Canadians aged 35 to 54 are worried about not having enough money to retire when they want to, according to a new survey by CIBC.
The survey, which polled more than 1,500 Canadian adults, found the vast majority (85 per cent) agreed they need to save more money, but 64 per cent aren’t making it a priority. The top obstacles to saving are: not earning enough income (46 per cent); getting derailed by unexpected expenses (29 per cent); and struggling to pay everyday expenses (24 per cent).
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However, in addition to their regular income, nearly two-thirds (62 per cent) of respondents receive on average $2,280 in extra money each year, in the form of employer bonuses, tax refunds and cash gifts. While 66 per cent of respondents use this extra money to buy themselves gifts, pay everyday expenses or chip away at debt, only 41 per cent use it to boost retirement savings or put it aside for an emergency.
With interest rates expected to edge higher and people living longer in retirement, Canadians need to do more than simply spend less, said David Nicholson, vice-president at CIBC, in a news release. “The real question is, how can you afford not to save? Every day that you delay starting a savings plan, the harder and more expensive it gets to meet your goals later in life.”
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More than half (55 per cent) of respondents agreed they’d be more likely to save if a set sum went automatically off their pay and directly into a dedicated savings account. “Paying yourself first is an easy and effective savings strategy,” said Nicholson.
“For most people, it’s actually easier to start with a savings goal first, set an automatic savings plan to meet that goal, and then, simply spend what’s leftover.”
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