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Many Canadians living pay cheque to pay cheque and unable to save, faced with the prospect of working longer before retirement.
Toronto (9 September 2011) – For many Canadians, a secure retirement is now a more distant dream. They are struggling to save for retirement and to make ends meet.
According to a survey of employees conducted by the Canadian Payroll Association (CPA), 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement."
A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.
Almost three-quarters of employees (74%) said they have saved less than a quarter of their retirement savings goal. This is particularly troubling when considering that 71% of the survey respondents were over the age of 35, with the bulk in their main saving years between 35 and 54.
Another significant finding – half of employees across the country reported that they are saving 5% or less of their net pay. This is well below the 10% of net pay that financial planning experts generally recommend as a retirement savings rate.
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