‘Tis the season to get all caught up in retirement planning and socking away as much as you can. And when it comes to wanting to contribute to our future retirement during our working years, the good news is that most Canadians want to. The bad news though, is that not many of us follow up those good intentions with any action. This, according to a recent report from CIBC, which was released yesterday.
As you can see from the chart above, even more Canadians want to put away money for their retirement in 2013 than they did in 2012 – a sign that retirement planning is becoming more important for even more of us.
Those that won’t contribute at all are also being more honest with themselves, seeing as how more Canadians admitted they would not make any contributions at all this year than last. 35 per cent of Canadians cited not having enough money as the reason for not making a contribution – the biggest reason given throughout the course of the survey.
As you can see from the chart below, of those that are planning to contribute, RRSPs are still the top choice for investment when Canadians need to decide between these and TFSAs. More Canadians are opting to use both savings vehicles however, with the majority choosing to sock away a little money in both types of accounts, rather than having only one primary retirement account.
However, planning to save for retirement isn’t the same thing as actually doing it. And CIBC says that even though we may want to put money away, most of us don’t actually end up doing so.
“While it’s positive that so many eligible Canadians plan to contribute towards their retirement this year, we know from previous years that only 26 per cent of eligible tax filers actually made a contribution to their RRSP but our data shows 47 per cent say they intend to contribute to their RRSP,” says CIBC managing director of tax and estate planning Jamie Golombek.
But Golombek also says that the situation isn’t hopeless; and that while it may seem as though there’s no money left for retirement planning, you might just not be looking in the right places.
“If you don’t have the money to make a contribution to your retirement savings, the solution may come from having a hard look at your budget. Saving for retirement is really about delaying some consumption from the present to the future.
By restructuring your debt, or reviewing your monthly cash flow, an advisor can help you find extra money to contribute towards your retirement savings.”