Canadians accurately predicted they'd be living with less in 2017, study shows

Professional advice increases financial confidence heading into RRSP season  

TORONTO, Nov. 15, 2016 /CNW/ - Ten years ago, 37 per cent of Canadians felt they would not be able to afford their lifestyle in 2017. According to a new Mackenzie Investments survey, they were right. Today, 36 per cent have had to cut back on some of the things they buy; proving Canadians were correct in their prediction when they answered a similar survey in 2006.

So what are Canadians saying about the next ten years? The survey, conducted by Leger, found when thinking about their lifestyle a decade from now, two-in-five (39 per cent) Canadians feel they will have to cut back.

Among those Canadians who believe they will have to cut back ten years from now, one-quarter (23 per cent) say this will be due to inflation, and one-quarter (23 per cent) believe they don't have enough savings. Salary expectations may also factor into this sombre outlook; most expect a salary increase of only one to five per cent— this is the same range that Canadians have seen their salaries increase in the past decade.

"While we've seen a lot of changes in the past ten years, if Canadians are making accurate predictions about their future lifestyle, it's a sign they have a realistic understanding of their finances," said Carol Bezaire, Vice President of Tax, Estate and Strategic Philanthropy for Mackenzie Investments. "However, the goal should be to create a sound financial strategy to ensure you don't have to give up any of the things you enjoy today."

Canadians closer to retirement even less secure in financial future

While four-in-ten Canadians believe they are in a better financial position compared to ten years ago, of those closest to retirement—those aged 65 and older— only 25 per cent echoed this sentiment.

• Forty-two per cent of them stated their financial position has not changed drastically in the previous decade, and around the same per cent stated their lifestyle has changed negatively over the past ten years.
• In both the 55-64 and 65 and over age groups, less than 35 per cent believe they are definitely on track to meet their retirement goals.

Their pessimistic perception could be attributed to a lack of confidence in retirement planning and being able to sustain their lifestyle. Survey findings show that:

• Only 16 per cent of Canadians feel confident in their contributions to an RRSP, and an overwhelming majority— 72 per cent— do not have a written financial plan.
• Additionally, when asked what would help increase feelings of security about the future, 40 per cent of Canadians said they want to discover new or additional ways to generate income.

"People who worry about their financial future but don't have a plan are like people who worry about getting lost but don't use a map.  Both a plan and a map are easily available, both reduce a lot of stress, and both typically help you reach your desired destination," added Bezaire.

Advice builds confidence

The lack of planning by Canadians may be correlated with a deficiency in seeking out financial advice— the survey found the majority (58 per cent) of Canadians do not use the services of a financial advisor. However, those who do use a financial advisor tend to be more knowledgeable about financial products. Almost 70 per cent of Canadians who use a financial advisor knew mutual funds could be held in an RRSP account, versus 35 per cent of those without a financial advisor.

Other findings from the 2016 survey found:

RRSP's aren't top of mind for all Canadians

• Findings show that 35 per cent of Canadians don't contribute to an RRSP, and at 37 per cent, this number was slightly higher for the age group typically preparing for retirement— those aged 55-64.
• Plus, Canadians who do not have a financial advisor or financial plan are significantly less likely to contribute to an RRSP. Canadians who use a financial advisor or have a financial plan are significantly more likely to feel excitement and confidence about making an RRSP contribution.

Saving for retirement may be confusing Canadians

• Canadians are not overly confident when it comes to their investment options for retirement savings, with 29 per cent feeling indifferent, 23 per cent feeling overwhelmed and 20 per cent confused.
• In fact, a quarter (25 per cent) of Canadians in the 18-44 age group say they feel confused when thinking about all the investment options available to save for retirement.

The youth continue to be the most optimistic

• Half of Canadians aged 18-34 believe they will have a better lifestyle in ten years—building on a similar finding a decade ago, when over 40 per cent of Canadians aged 18-34 believed their lifestyle in 2017 would improve.

For more information on Mackenzie Investments visit www.mackenzieinvestments.com

NOTE: Regional results available upon request.

A survey of 1564 Canadians was completed online between October 10th and 13th 2016 using Leger's online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-2.5%, 19 times out of 20.

The 2006 survey results are based on telephone surveys conducted for Mackenzie Financial Corporation by Decima Research between October 26 and October 30, 2006 with a representative sample of 1,000 Canadians aged 18 and over. The results are considered accurate within +/- 3.1% 19 times out of 20.

About Mackenzie Investments
Mackenzie Investments was founded in 1967, and is a leading investment management firm providing investment advisory and related services. With $64.3 billion in assets under management as of October 31, 2016, Mackenzie Investments distributes its investment services through multiple distribution channels to both retail and institutional investors. Mackenzie Investments is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's premier financial services companies with over $139 billion in total assets under management as of October 31, 2016. For more information, visit mackenzieinvestments.com.

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SOURCE Mackenzie Financial Corporation

Trish Tervit, Director, Communications and Media Relations, Mackenzie Investments, 416-967-2166, [email protected]