The Telegram (St. John's)
Crisis brewing as Canadians stop saving for retirement
Canadians may have socked away more money this past year, but that hasn’t translated into larger retirement savings.
In fact, many say they didn’t set any cash aside at all for retirement.
According to the third annual Canadian Retirement Survey from Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data, two out of three, or 63 per cent, of Canadians neglected their retirement savings. That’s five per cent more than the year before.
That comes as 46 per cent say they’ve saved more than usual since the pandemic began. But even of those, 52 per cent put nothing into their retirement piggy banks.
Meanwhile, anxiety over saving enough is keeping Canadians awake at night. Half say it’s their top concern, just behind worries over the costs of day-to-day living.
And it’s a fear that stretches across all income levels, from those making $50,000 or less (52 per cent are “very concerned”) to those making over $100,000 (42 per cent).
“Canadians across the board are acutely aware of the importance, and challenge, of saving for retirement,” Steven Mccormock, SVP, Plan Operations, HOOPP, said in a news release.
Retirement planning has had to take a backseat for many amid increased financial pressures brought on by the pandemic. Fifty-two per cent say the crisis has hurt their finances. But it’s especially bruised those who are younger or have lower incomes.
People aged 44 and under were twice as likely to report a major negative impact to their finances (24 per cent), compared to only 11 per cent of those aged 60 plus. It’s the same thing for those who make less than $50,000 a year. Twenty-five per cent say their finances suffered, compared to 11 per cent of those making $100,000 or more.
“The pandemic has exacerbated the divide between those who can save for retirement and those who can’t,”
David Coletto, Abacus Data’s chief executive, said. “Those who are the least likely to save – younger and lowerincome Canadians – were the hardest hit by the health crisis.”
With so many people struggling to save, 63 per cent of Canadians fear there’s a retirement crisis brewing. And 65 per cent think saving for retirement is just too expensive to manage.
That could be one reason why many are looking to their employers to help bridge the retirement savings gap. Canadians say they want good pension plans at work, with 71 per cent saying they’d even be willing to accept a lower paycheque in exchange for a solid plan.