How you can join the many Canadians actively saving for retirement
A new survey from Scotiabank shows the majority of Canadians are actively saving for their golden years. The poll shows 65 per cent of Canadians are taking part, with high savings rates among generations young and old:
- 74 per cent of Gen Xers are saving for retirement;
- 73 per cent of the “Sandwich Generation” (Canadians in their 30’s and 40’s, supporting both children as well as their aging parents);
- 61 per cent of Boomers (Canadians 55 years and older);
- 56 per cent of Millennials (aged 18-34).
The numbers are encouraging for Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada.
“We tend to get caught up in the ‘now’ of life – monthly credit card bills, mortgages, grocery bills,” says Schwartz. “Despite this, many Canadians are looking ahead to the future and are displaying some great foresight.”
The diligence couldn’t come at a better time – Statistics Canada recently reported the number of seniors in debt increased by 40 per cent between 2012 and 2015. Schwartz speculates these kinds of numbers may be scaring people straight.
“They are called the Golden Years for a reason,” says Schwartz. “It should be a time of freedom – not stress. I think it’s important to note it is never too late or too early to get started on your dream retirement.”
Schwartz worries about the 35 per cent of Canadians who are not actively saving for retirement, and makes the following suggestions in order to get started:
- Set up an RRSP – This is your best tool to help ensure a happy retirement. Your contributions are tax-deductible, your savings grow tax free, and you can even borrow from your RRSP to buy your first home.
- Automate your contributions – Every payday, there will always be an excuse to over spend on something frivolous. It is important to set up an automatic contribution to your RRSP and take away the temptation.
- Make it part of your budget – Fifteen per cent of a healthy budget should be dedicated to savings. If you are having trouble hitting that mark, you may be spending in an unsustainable way and you will need to recalibrate your budget and live more within your means.
- Pay down debt – What sounds better to you – padding your retirement fund or feeding your creditors? Eliminating high-interest debt will free up more money for your own needs, instead of flushing it down the interest toilet. Employ an aggressive debt repayment plan and wrestle back those interest dollars.
- Know where to get help – Thirty-five per cent of Canadians have a debt-to-income ratio of 2.0 or more, meaning they owe at least two dollars for every one dollar they earn. It is probably no coincidence the same percentage of Canadians is failing to save for retirement. If you are drowning in debt, you may need a lifesaver in the form of professional help. Know your options and do not be afraid to reach out for a helping hand.
Do you have massive credit card bills that are preventing you from saving for a healthy retirement? Stop helping out your creditors and start helping yourself by calling 1-888-294-3130. Our trained credit counsellors will tell you how we can help you crush your debt.