Over Half of Canadians Say They Don’t Have Enough Money to Save for Retirement: Poll

Over Half of Canadians Say They Don’t Have Enough Money to Save for Retirement: Poll
Canadian $100 bills are counted in Toronto on Feb. 2, 2016. (The Canadian Press/Graeme Roy)
Isaac Teo

More than half of Canadians indicate they are behind on retirement savings, according to a recent survey commissioned by tax preparation firm H&R Block Canada.

The survey, published on April 3, found that 52 percent of Canadians are unprepared for retirement as they don’t feel they have enough money left at the end of the month to save for it. Half of them (50 percent) say they plan to have a “side gig” when they retire.

Peter Bruno, president of H&R Block Canada, says Canadians now have an “evolved” vision of retirement.

“Not so long ago, the traditional vision of retirement was that at around 65 years old, Canadians ‘hung up their hats’ and celebrated the end of full-time employment.,” said Bruno in a press release.

“What we’re seeing now is that the vision for retirement has evolved dramatically—fuelled by shifts in tax-friendly savings plan options, evolving workforce realities, the gig economy, and the prevailing economic environment.”

The online survey, conducted with 1,501 Canadians who are members of the Angus Reid Forum, indicated 36 percent of the respondents between the ages of 18-54 don’t believe they would ever retire.

The survey, however, noted there are still 44 percent who anticipate retiring before hitting the 64-year mark. According to Statistics Canada in January, the average retirement age in 2022 was 64 years and 6 months in age.
“Of those who’ve not yet retired, there’s a wide range of retirement age expectations, including between 45-54 years old (5 percent); 55-64 (39 percent); 65-69 (35 percent); 60-64 (27 percent); 70+ (21 percent),” said the survey, conducted from Feb. 14-16.

‘Prevailing Lack of Understanding’

A “mixed sentiment” revolved around putting money away for retirement in the current economic climate. Sixty-five percent of the Canadians polled say they will likely put less into their Tax-Free Savings Account (TFSA), and Registered Retirement Savings Plan (RRSP) this year due to the increased cost of living.

“This compares to 32 percent who feel like they put enough money away each month for their retirement and 46 percent who feel good about their retirement strategy,” the survey said.

Researchers said during the survey period, 56 percent of Canadians reported having an RRSP, while six percent plan to set one up in the future. As for TFSA, 54 percent said they have one, and six percent intend to establish one at some point.

“However, the research reveals there’s still a prevailing lack of understanding around tax-friendly retirement savings options and strategies (55 percent of Canadians), including among those that already have retirement plans in place,” they wrote.

A “heavy reliance” on employer-sponsored registered pensions (37 percent) and government-assisted retirement plans (19 percent) was also noted among the respondents, the survey found.

“There is no one-size-fits-all retirement plan or strategy for Canadians, but regardless of your personal situation, having a good understanding of your options and how tax-friendly savings plans work is key,” Bruno said.

“When it comes to tax filing time, it’s also important you understand any changes that could impact how to maximize your tax return and minimize your taxable income.”

Among the changes this filing season relating to retirement savings plans include increased limits in RRSP and TFSA, changes to Old Age Security limits, and increase in Canada Pension Plan maximum contributions, according to the release.