Advisors help keep boomers on track

Boomers started 2011 with good intentions to put more away for retirement. However as the warm weather signals the mid-point of the year, many don’t feel they are delivering on their 2011 goals when it comes to building their savings.

In a recent CIBC poll conducted by Harris-Decima, 30% of respondents aged 45-64 felt they were doing a poor job of building their savings so far in 2011, including 17% who rate their progress as “very poor.” Overall, less than half of boomers surveyed (42%) believe they are making good progress in building their savings so far in 2011.

These results suggest boomers are not placing enough emphasis on an area they cited as their primary focus at the start of the year. In a survey of Canadians’ top financial priorities for 2011 released by CIBC in January, boomers were the most likely to say that planning for their retirement was their top financial priority. Yet, the more recent CIBC/Harris Decima poll shows that just over half of boomers are proactive when it comes to building their savings:

• Only 53% have a regular savings plan in place where they automatically put money away each month
• 58% have a budget in place for themselves that they track each month
• 61% have met with an advisor in the last 12 months

“While boomers have taken the important first step of identifying retirement as their top financial priority, some don’t feel confident about the progress they have made when it comes to building their savings so far in 2011,” says Christina Kramer, executive vice-president, retail distribution and channel strategy, CIBC.

Boomers who have consulted with an advisor in the last 12 months
Atlantic	53%
Quebec	59%
Ontario	63%
Manitoba/Saskatchewan	69%
Alberta	64%
British Columbia	59%

“Saving is clearly a priority for Canadians who are approaching retirement, and seeing only half of Canada’s largest demographic with a regular savings plan in place suggests a significant opportunity for more boomers to start saving on a regular basis,” she added.

The good news is there is still time to get back on track before the end of the year. Survey results indicated that simple steps can lead to feeling better about your progress in building your savings.

Putting money away as part of a regular savings plan makes a significant difference in building savings over the long term. Among boomers who feel they have made good progress in building their savings so far in 2011, 70% have a regular savings plan in place. Among those who feel they have done a poor job of building their savings in 2011, only 32% have a regular savings plan.

Boomers who have a regular monthly savings plan in place
Atlantic	49%
Quebec	51%
Ontario	57%
Manitoba/Saskatchewan	56%
Alberta	51%
British Columbia	52%

Boomers who were positive about their savings progress were likely to have met with an advisor, with 72% saying they had met with an advisor in the last 12 months. Among those who feel they have done a poor job of building their savings in 2011, only 48% had met with an advisor.

“There’s a clear link between feeling positive about your savings progress so far this year and certain key activities like having a regular savings plan in place, or meeting with an advisor to discuss your overall financial picture,” Kramer said. “Meeting with an advisor can help to ensure your savings are on track to meet your income targets in retirement.”

Kramer also believes there is an opportunity for those already saving regularly to ensure they review their plans on an ongoing basis.

Boomers with a monthly budget in place, and track it each month
Atlantic	72%
Quebec	60%
Ontario	62%
Manitoba/Saskatchewan	63%
Alberta	46%
British Columbia	45%

“Even among boomers who have a regular savings plan in place, the financial strategy they created a number of years ago may need to be updated, including the amount they are putting away each month as they near retirement,” she explains.

Kramer adds that once boomers have established a regular savings plan with their advisor, they can begin to look at the broader investment options that may be right for them to optimize retirement income, such as deciding how to utilize TFSAs versus RRSPs and other options.