Fewer than one-third of North Americans confident they will have enough money for a secure retirement
TORONTO, May 9, 2012 – When it comes to ensuring their financial security in retirement, Canadians overall believe that they are primarily responsible (59 per cent), with the rest of this duty falling to the government (19 per cent), their employer (10 per cent), another family member (eight per cent) and their financial advisor (five per cent), according to the latest RBC Canadian Consumer Outlook (RBC CCO).
“It’s encouraging to see Canadians playing their part in planning for their retirement,” said Amalia Costa, head, Retirement Strategies, RBC. “This is a financial responsibility that you don’t have to undertake alone. A financial advisor can assist you in getting started, understanding your options, incomes sources and determining what the best approach is for you.”
When it comes to looking at their prospects for retirement, consumers on both sides of the border share similar beliefs. Canadians (61 per cent) are more confident of their understanding of the retirement savings options available to them with almost half (45 per cent) of Americans saying the same. However, only 29 per cent of Americans and 36 per cent of Canadians are confident that they will have enough money to have a secure retirement.
What is troubling, particularly given the aging populations, is that four-in-10 (42 per cent) of Americans and 37 per cent of Canadians are worried they won’t have enough money saved to be financially secure. Consequently, more than one-in-four North Americans believe they will have to work past retirement age to make enough money to live, with slightly more Americans (29 per cent) than Canadians (26 per cent) believing this to be true. To address their concern about financial security in retirement, 34 per cent of Canadians and 36 per cent of Americans say they save a regular amount of money from each paycheque.
In Canada, more than half (54 per cent) said they didn’t have enough money to take advantage of all the savings options available to them, and 15 per cent claim there are too many options available to make clear decisions on how to properly invest their money.
“With the volumes of financial and investment information available, awareness of the need to save is greater than ever before, and even for those who have retirement savings plans, meeting retirement goals can become a challenge,” added Costa. “If you are able to, there are catch-up strategies you could use to reach your retirement goals.”
To catch up on retirement savings, Costa advises doing the following:
- Make regular contributions to your RRSP: Sometimes, people who are behind in their saving are reluctant to even explore strategies that could help them get back on track. Why? Because they think they can’t afford it. One approach is to start slowly, setting aside small amounts. Consider an automatic RRSP contribution program to make these small steps a priority in your financial life.
- Invest your tax refund: If you receive a tax refund, take advantage of this new found money by investing it in your TFSA or RRSP. You will not only be growing your investment savings, you’ll also be ahead in your contributions for that current tax year.
- Take out an RRSP loan: In certain situations, it makes sense to take out a loan to top up your RRSP. For example, if you have unused RRSP contribution room, you can borrow money to catch-up, and then use the tax savings to help repay the loan.
- Consider adjusting your current lifestyle: Making some lifestyle sacrifices now can help you retire with a higher standard of living.
About RBC’s savings and other financial advice and interactive tools
Canadians can freely access savings advice and resources at www.rbc.com/savingsspot. In addition, all personal RBC online banking clients can use myFinanceTracker, a no-cost interactive financial management tool, to create a budget and track their spending habits. Whether Canadians want to get more from their day to day banking, protect what’s important, save and invest, borrow with confidence or take care of their businesses, the RBC Advice Centre can help answer their questions. Interactive tools and calculators provide customized information covering many facets of personal finance. In addition, online advice videos are updated regularly to reflect current trends and to answer the questions that are top of mind with Canadians. With the guidance of RBC advisors who are available to chat live, Canadians have access to free, no-obligation professional advice about RBC products and services and personalized one-on-one service at www.rbcadvicecentre.com.
About the RBC Canadian Consumer Outlook Index
The survey is conducted online via Ipsos Reid’s national I-Say Consumer Panel to 3,398 Canadians (489 British Columbia, 481 Alberta, 539 Saskatchewan/Manitoba, 778 Ontario, 525 Quebec, 586 Atlantic Canada). Weighting was then employed to balance demographics and ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. Data collection was April 2 to 9, 2012. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of �1.7 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled.
About the RBC U.S. Consumer Outlook Index
The RBC U.S. Consumer Outlook Index provides the most up-to-date and comprehensive outlook of U.S. consumers based on data collected from interviews with a nationally representative sample of more than 1,000 U.S. adults conducted over a multi-day polling period each month by Ipsos, the world’s second-largest market and opinion research firm. The results in this news release reflect some of the findings of the Ipsos poll of 1,005 U.S. adults conducted on March 29- April 1, 2012. The RBC Consumer Outlook Index is released within 36 hours after the U.S. online panel members are interviewed. Weighting is employed to balance demographics and ensure that the survey sample’s composition reflects that of the U.S. adult population according to Census data and to provide results intended to approximate the sample universe. Statistical margins of error are not applicable to online polls because they are based on samples drawn from opt-in online panels, not on random samples that mirror the population within a statistical probability ratio. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.