CPA survey finds many Canadians now faced with the prospect of working longer before retirement
In Ontario, 60% living pay cheque to pay cheque and 74% falling short of their retirement savings goal
TORONTO, Sept. 8, 2011 /CNW/ - For many people, the 'golden years' are
now a more distant dream. They are struggling to save for retirement
and to make ends meet.
According to the third annual survey of employees conducted by the
Canadian Payroll Association (CPA), 40% of Canadians said they'll
likely have to retire later than they previously planned. The region
with the highest percentage of workers expecting they'll have to
postpone retirement was Ontario (43%).
The primary reason (cited by 40% of Canadians) was "I'm not saving
enough money for retirement."
Living pay cheque to pay cheque
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.
The regions with the highest percentage of workers living pay cheque to
pay cheque were the Atlantic provinces (64%) and Ontario (60%), followed by the Prairies (56%) and the West Coast (53%).
Financial planners generally recommend that people have approximately
three months of expenses (rent, mortgage, bills, groceries, etc.) as an
Failing to save for retirement
Almost three-quarters of Canadian employees (74% in Ontario) said they have saved less than a quarter of their
retirement savings goal.
"This is particularly troubling when you realize that even the older age
groups are not saving for their retirement," states Dianne Winsor, CPM,
Chairman of the CPA. "For example, more than 40% of Canadian employees
aged 55 to 65 are still less than a quarter of the way to their
retirement savings goal."
Another significant finding - 50% of employees across the country (53% in Ontario) reported that they are currently saving only 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.
Patrick Culhane, FCMA, CAE, CPA President noted that payroll
professionals can often help employees administer a savings plan. This
may include the employee directing a portion of their net pay to a
separate savings account and/or into a Registered Retirement Savings
Program. "Develop a savings plan, and then talk to your payroll
professional about how you can administer it effectively through
payroll," Culhane urged.
How much do employees feel they'll need to live comfortably in
Almost two-thirds of Canadian workers (63%) felt that they would need more than $750,000.
What could they do to improve their financial situation?
Most Canadians do understand what they could be doing to improve their financial
situation and meet their retirement goals. Ranked in order of
importance, respondents thought they should be spending less (32%),
paying off credit card debt (22%), reducing their mortgage (19%) and
contributing more to their retirement savings (14%).
Visit www.payroll.ca, under Media Room, News Releases, for further information, including a summary of the findings from the
2011 CPA NPW Employee Survey.
2,070 employees responded to this online survey open between July 6,
2011 and August 2, 2011 using a convenience sampling methodology.
Respondents to the survey were recruited by members of the CPA with
whom they work to get responses from employed Canadians. This Canadian
Payroll Association developed survey was conducted by Framework
Partners, a market research and strategic planning firm. The survey is
consistent with a margin of error of plus or minus 2.2% 19 times out
20, but as a non-probabilistic methodology was used a definitive margin
of error cannot be expressed.
About the CPA:
Payroll professionals in 1.5 million organizations across Canada are
responsible for ensuring the timely and accurate payment of $810
billion in wages and taxable benefits, $250 billion in statutory
remittances to the federal and provincial governments, and $90 billion
in health and retirement premiums, while complying with more than 191
regulatory requirements. The Canadian Payroll Association (CPA) has
influenced the payroll compliance practices and processes of hundreds
of thousands of employers since 1978. As the authoritative source of
Canadian payroll knowledge, the CPA affects the legislative processes
and practices of payroll service and software providers, as well as
hundreds of thousands of small, medium and large employers.
National Payroll Week (September 12 - 16) recognizes the accomplishments
of payroll professionals and the CPA by building greater awareness of
the size and scope of payroll and its impact on employers, employees
and government across Canada.
SOURCE Canadian Payroll Association
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