Ontarians forgoing saving for retirement to pay off debts: Survey

TORONTO, Jan. 6, 2014 /CNW/ - For 40 per cent of Ontarians, saving for retirement is taking a back seat to servicing their debts. According to a study released today by Meridian, Ontario's largest credit union, 21 per cent of Ontarians say their top financial priority is paying off debt, while 19 per cent say it is to pay down their mortgage. An additional 10 per cent said their top financial priority was to stop having to live paycheque-to-paycheque.

The findings from Meridian's Ontario Retirement Study, conducted by Harris/Decima, raise serious questions about the long-term financial security of many Ontarians. Of the 21 per cent of respondents who said they had yet to start saving for retirement:

  • 52 per cent said they were focused on paying off debt,
  • 51 per cent said they couldn't afford it, and
  • 49 per cent indicated saving for retirement is not a priority for them at the moment.

"As household debt in Canada hits a new high, it's encouraging to see Ontarians recognizing how important debt repayment is to their financial future," says Bill Maurin, Meridian's Acting Chief Executive Officer and Chief Financial Officer. "At the same time, however, it's important to not lose sight of their retirement goals. Saving for the future can be easier if you put your investments on autopilot with a pre-authorized contribution plan to contribute to an RRSP or TFSA. If you coordinate the withdrawals to align with your payday, the money likely won't even be missed."

The study also revealed that:

  • RRSPs (75 per cent), pension plans from work (58 per cent) and TFSAs (50 per cent) are the most popular retirement savings products held by Ontarians.
  • Today's Ontarians plan to retire at 62 years of age, while current retirees, on average, retired at 59 years of age.
  • 41 per cent of those who have not yet retired say they are confident that they are on track to retire at the age they want.
  • Nearly one-in-five Ontarians (18 per cent) say they expect some sort of inheritance to help with their retirement needs.

"Saving for retirement while paying down your debt or mortgage means you need to be proactive and take charge of your personal finances, but the short and long-term benefits are well worth the effort," says Maurin. "The first step is to determine your financial goals and work with a trusted financial advisor to build a plan that will help you achieve them."

About the Meridian Ontario Retirement Study
657 telephone surveys were completed by Harris/Decima with residents of Ontario between November 14 and November 24, 2013. Results are considered accurate to within ± 3.8 percentage points, 19 times out of 20.

About Meridian
With over 70 years of banking history, Meridian is Ontario's largest credit union, helping to grow the lives of its more than a quarter of a million Members, including over 19,000 business Members. Meridian has $10 billion in assets under management and delivers a full range of financial services online, by phone, by mobile and through a network of 64 branches and 7 business centres. Meridian Members also have access to THE EXCHANGE® Network, with more than 2,400 no-fee ABMs across Canada and 340,000 ABMs in the United States. For more information, please visit: meridiancu.ca.

EDITOR'S NOTE: For a digital copy of the accompanying high resolution infographic please contact Meridian.

Image with caption: "Retirement Savings in Ontario (CNW Group/Meridian Credit Union)". Image available at: http://photos.newswire.ca/images/download/20140106_C7111_PHOTO_EN_35343.jpg

SOURCE: Meridian Credit Union

For further information:

Elissa Smitten
Communications Advisor
Office: (416) 597-4444 ext. 2621
Cell: (647) 530-5682
Email: elissa.smitten@meridiancu.ca 

Lizanne McReelis for Meridian
Work: (647) 438-5414
Email: lizanne.mcreelis@rogers.com

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