Canadians not prepared for retirement: CIBC

By Vikram Barhat | January 19, 2012 | Last updated on January 19, 2012
2 min read

Battered financial markets and anaemic economic growth have forced Canadians to make debt management, not retirement, the primary focus of financial planning. It’s little surprise that nearly half of Canadians say they are not financially prepared for their retirement, according to a new CIBC poll.

The study, which polled 1,005 Canadians across a wide range of ages, showed an alarming lack of financial preparedness for retirement, particularly among baby boomers who named retirement planning their top financial priority for 2012.

“Planning for retirement is something almost every Canadian thinks about at this time of year, and our poll results show that many would like to be further ahead when it comes to their retirement plans,” commented Christina Kramer, executive vice-president, retail distribution and channel strategy, CIBC.

“Our poll results reveal a split in the country when it comes to retirement, with those who are actively planning ahead are about three times more likely to feel prepared for their future retirement than those who have not yet mapped out their retirement strategy.”

On a more positive note, the survey revealed that among the Canadians who are actively planning for their retirement 76% feel financially prepared to take that step versus 25% of those without a plan.

Other key findings of the poll noted that 53% of Canadians have a long term investment plan for their retirement while 44% say they are not financially prepared for that stage of their life.

The highest number (49%) of those who said they are not financially prepared for retirement were in the age group of 35-44, while only 31% in the 55-64 year group felt the same.

“Regardless of what stage of life you’re currently in, you can benefit from having a discussion with a financial advisor who can help you establish a plan that works to meet your goals,” said Kramer. “The key is to take action today and not wait for another year to go by.”

Even Canadians with an existing long term investment plan can benefit from reviewing their plan to ensure it continues to meet their needs. Planning for retirement, she said, is a two-pronged approach which includes debt management in addition to knowing how much to save each year to meet long term goals.

“We’re all busy, and some Canadians have fallen into the habit of making their RRSP contribution just before the deadline without taking the time to sit down and understand where they are versus their goals, and what they might need to change to keep making progress,” added Kramer.

“We encourage Canadians to make this the year you use the time before the contribution deadline to look at your broader financial picture, particularly given the difference we see it making in the confidence people have in their retirement plans.”

By region, Quebec (58%) had the highest percentage of Canadians who do not feel financially prepared for their retirement, followed by Alberta (46%), while Atlantic Canada had the lowest (32%). Ontario (40%) was well below the national average of 44%, but well above B.C., Manitoba/Saskatchewan (37%).

Vikram Barhat