Rising costs rein in retirement savings

Rising costs are taking a bite out of Canadians’ ability to save for retirement, BDO’s latest affordability index suggests.

In the fifth annual survey, which examines the affordability and financial health of Canadians, more than three-quarters of respondents (78%) said their personal finances had worsened because of inflation.

As a result, savings were suffering, with 62% of respondents saying they were saving less.

Specifically, more than four in 10 respondents cut their retirement savings. And a majority, 71%, said saving for retirement was a challenge — an increase of six percentage points over 2021’s results.

Consequently, nearly two-thirds of respondents (64%) said they weren’t on track to save enough for retirement — an increase of four percentage points from the previous year.

About one-third said they had no idea what their retirement plans will be, and the same proportion said they’ll never stop working (through part-time/occasional work) despite wanting to retire.

Angus Reid conducted the survey of 2,008 Canadians age 18+, who were members of the Angus Reid forum, between Aug. 5 and Aug. 11 of this year. The polling industry’s professional body, the Canadian Research Insights Council, says online surveys can’t be assigned a margin of error because they don’t randomly sample the population.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.