Am I saving enough to retire? Vast majority of Canadians just don't know: CIBC poll
$756,000 is the average amount Canadians think they'll need in retirement, yet as many as 90 per cent don't have a retirement plan
TORONTO, Feb. 8, 2018 /CNW/ - CIBC (CM:TSX) (CM:NYSE) – Canadians estimate that they will need an average of $756,000 in retirement savings, but the vast majority (90 per cent) do not have a plan to achieve the lifestyle they want in their golden years, a recent CIBC poll finds. Moreover, women are less likely than men to be retirement ready and more apt to rely on the advice of family and friends.
"If you don't have a retirement plan, you're throwing darts at numbers in the dark, guessing at how much you'll need to live on comfortably once you've stopped working," says Jennifer Hubbard, Managing Director, CIBC Financial Planning and Advice. "It's important to take an honest look at your finances today, and determine 'what' your retirement goals and dreams are because that will influence 'when' you retire and 'how much' it will cost. That way, you can find the best path to get from here to there."
A retirement plan involves determining the lifestyle you want to lead in retirement and identifying your sources of income over and above employer-sponsored plans, the Old Age Security and Canada Pension Plan, or Quebec Pension Plan, estimating your expenses, having a savings program, and managing your assets based on your risk tolerance.
Key poll findings:
- 90 per cent of Canadians, who are not currently retired or semi-retired, do not have a formal and detailed retirement plan that describes the lifestyle they want
- 53 per cent aren't sure if they're saving enough
- 37 per cent either aren't able to save or haven't thought about retirement
- $756,000 is the average amount Canadians estimate they'll need in personal savings to retire comfortably, while 26 per cent don't know
- Millennials (aged 18-34) believe they'll need the most at about $917,000, compared to $842,000 for Generation X (aged 35-54), and $518,000 for Boomers aged 55+
- $184,000 is the average amount Canadians say they've saved for retirement
- 30 per cent have no retirement savings, and a further 19 per cent have saved less than $50,000
- 63 is the average age at which Canadians plan to, or did, retire
On the cusp of retirement
The poll findings also show that almost a third (32 per cent) of those nearing, or on the cusp of retirement age (45-64), have nothing saved for their retirement; and among those with retirement savings, the average value of their nest egg is $345,000, while most (49 per cent) have saved less than $250,000.
"It's less about how much you've saved, but how your savings line up -- or don't line up – with your lifestyle goals that really matters," says Ms. Hubbard. "With so much on the go, your retirement plan can be the single most powerful and effective tool for building your wealth and financial security. And, it's never too late to start."
Fewer women than men prepare for retirement
The poll also finds that fewer women than men have a formal retirement plan, or at least a 'good idea' what their retirement income needs will be, 22 per cent compared to 32 per cent, respectively. Further, far more women than men at or nearing retirement (aged 55+) don't have a plan in place, 43 per cent compared to 27 per cent, respectively.
Nearly a third (32 per cent) of women admit they 'don't know' how much personal savings they'll need to retire comfortably, compared to 19 per cent of men, and among those with retirement savings, women have saved on average nearly 25 per cent less than men.
While the findings show few women and men seek expert advice when saving for retirement, more women than men rely on the advice of family and friends, especially those closest to retirement age (55-64) at 21 per cent and 14 per cent, respectively.
Despite the vast majority of women being either the primary or joint decision makers when it comes to investing for their household, only half said they feel confident or knowledgeable when it comes to their finances, previous CIBC research found.
"The value of having a trusted financial advisor and personalized financial roadmap is in the confidence and peace of mind it gives you knowing that you're saving enough to comfortably live the life you want both now and down the road," says Ms. Hubbard.
Tips to Retire Well:
- Plan your lifestyle - make the future as predictable as possible
- Understand your spending today and estimate what it's likely to be in retirement
- Work with a financial advisor to project your income and expenses
- Put your plan on auto-pilot with regular deposits to a dedicated savings account
- Invest for the long term and revisit your investment plan regularly, at least once a year
- Determine the best time to draw down on public pension benefits or personal savings
KEY POLL FINDINGS:
How Canadians who are not currently retired or semi-retired describe their retirement savings plan:
| All |
Men |
Women |
18-34 |
35-54 |
55+ |
|
| I have a formal and detailed plan that describes my desired retirement lifestyle, the income I will need and I save regularly to achieve that goal |
10 % |
13 % |
8 % |
8 % |
11 % |
14 % |
| I have a good idea what my income needs will be and make regular contributions, but I don't know if I'm saving enough |
16 % |
19 % |
14 % |
13 % |
16 % |
24 % |
| I make regular deposits to my retirement savings account(s), but I don't know what my income needs will be and I don't know if I'm saving enough |
21 % |
21 % |
21 % |
23 % |
21 % |
14 % |
| I don't know what my retirement income will be, but I try to put money aside towards retirement when I can |
16 % |
15 % |
16 % |
20 % |
13 % |
12 % |
| I know I need to save for retirement, but I'm not able to save |
22 % |
19 % |
25 % |
16 % |
25 % |
27 % |
| I haven't thought about retirement and I have no savings dedicated to retirement |
15 % |
14 % |
17 % |
20 % |
14 % |
8 % |
Total amount of personal savings Canadians think they'll need or thought they'd need to retire:
| All CDNS |
Men |
Women |
18-34 |
35-54 |
55+ |
|
| $0 |
1 % |
1 % |
1 % |
- |
2 % |
2 % |
| $1-$49,999 |
5 % |
5 % |
4 % |
2 % |
3 % |
8 % |
| $50,000-$99,999 |
7 % |
9 % |
6 % |
7 % |
5 % |
10 % |
| $100-000-$249,999 |
10 % |
10 % |
9 % |
5 % |
10 % |
13 % |
| $250,000-$499,999 |
12 % |
12 % |
12 % |
13 % |
11 % |
13 % |
| $500,000-$749,999 |
11 % |
12 % |
9 % |
11 % |
11 % |
9 % |
| $750,000-$999,999 |
9 % |
9 % |
8 % |
10 % |
10 % |
6 % |
| $1,000,000 - |
14 % |
15 % |
13 % |
19 % |
15 % |
8 % |
| $2,000,000 |
6 % |
7 % |
4 % |
7 % |
7 % |
2 % |
| I don't know |
26 % |
19 % |
32 % |
25 % |
25 % |
28 % |
| Mean |
$756,410 |
$779,950 |
$729,340 |
$916,750 |
$842,360 |
$518,240 |
Total amount of personal savings Canadians have saved for retirement:
| All CDNs |
Male |
Female |
18-34 |
35-54 |
55+ |
|
| $0 |
30 % |
26 % |
34 % |
37 % |
37 % |
16 % |
| $1-$49,999 |
19 % |
20 % |
18 % |
31 % |
18 % |
10 % |
| $50,000 - $99,999 |
9 % |
10 % |
8 % |
8 % |
10 % |
9 % |
| $100,000 - $249,999 |
11 % |
13 % |
9 % |
8 % |
11 % |
13 % |
| $250,000 - $499,999 |
7 % |
9 % |
6 % |
2 % |
6 % |
13 % |
| $500,000 - $749,999 |
3 % |
3 % |
3 % |
1 % |
3 % |
5 % |
| $750,000 - $999,999 |
2 % |
3 % |
1 % |
1 % |
2 % |
4 % |
| $1,000,000 - $1,999,999 |
2 % |
3 % |
2 % |
2 % |
2 % |
3 % |
| $2,000,000+ |
1 % |
1 % |
- |
- |
1 % |
2 % |
| Prefer not to say |
11 % |
10 % |
12% |
5 % |
6 % |
21 % |
| I don't know |
5 % |
3 % |
7% |
5 % |
5 % |
5 % |
| Mean (including $0) |
$183,500 |
$225,900 |
$139,600 |
$95,000 |
$151,800 |
$315,800 |
| Mean (excluding $0) |
$284,700 |
$319,600 |
$240,800 |
$160,400 |
$261,200 |
$404,000 |
Top sources for advice about saving for retirement among all Canadians:
| All |
M |
F |
18-34 |
35-54 |
55+ |
||
| Financial expert/professional |
35 % |
38 % |
32 % |
26 % |
31 % |
47 % |
|
| Financial planner |
20 % |
22 % |
19 % |
15 % |
17 % |
29 % |
|
| Professional Investment |
15 % |
19 % |
12 % |
12 % |
13 % |
21 % |
|
| Accountant |
8 % |
8 % |
7 % |
6 % |
8 % |
9 % |
|
| Family and/or friends |
22 % |
18 % |
25 % |
40 % |
16 % |
12 % |
|
| Other |
6 % |
5 % |
6 % |
5 % |
5 % |
7 % |
|
| No one - I do it myself |
31 % |
34 % |
28 % |
19 % |
35 % |
37 % |
|
| I haven't thought about retirement |
17 % |
14 % |
20 % |
27 % |
22 % |
4 % |
|
About the 2018 Retirement Savings Poll:
From January 12th to January 14th 2018 an online survey was conducted among 1,523 randomly selected Canadian adults who are Angus Reid Forum panellists. The margin of error—which measures sampling variability—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking, business, public sector and institutional clients. Across Personal and Small Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC offers a full range of advice, solutions and services through its leading digital banking network, and locations across Canada, in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/en/about-cibc/media-centre.html or by following on LinkedIn (www.linkedin.com/company/cibc), Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.
SOURCE CIBC - Consumer Research and Advice
Jessica Botelho, Public Relations, 416-980-8859 or [email protected]
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