20% betting that CPP, lotteries or inheritance will make up for failure to save in RRSPs
You have to laugh at the finding of the TD Retirement Savings Poll, which today reported that 20% of Canadians are "counting on" a lottery win, an inheritance or the CPP for a comfortable retirement, "instead of contributing to an RRSP."
It's not like they don't WANT to retire: fully 36% of the 1,002 people polled in January can't wait to stop working while another 30% feel anxious even thinking about saving for retirement because they realize they haven't saved enough.
I can't put it any better than TD Canada Trust senior vice president Carrie Russell [pictured]: "Instead of betting on the lottery, bet on yourself."
91% have retirement fears; 52% under 65 "scared"
Retirement fears are widespread, TD says, with 91% confessing to fears about retirement and 52% of workers under 65 "scared" that they have not saved enough money for a comfortable retirement. Even so, the situation isn't hopeless, since 64% are at least contributing something to RRSPs. Of this group 53% make fixed monthly deposits, 29% make one lump sum payment a year and 18% do both. TD doesn't mention the new TFSAs but at least 3 million have also anted up for Tax Free Savings Accounts, which I think every Canadian over 18 should maximize.
TD should push TFSAs over RRSPs if young are the target
The poll found 41% between 18 and 34 do not currently contribute to an RRSP. Obviously, the earlier you start the better, especially the TFSA, which lets you put in $5,000 even if you have no earned income. The RRSP is based on 18% of the prior year's income so if the financial services industry wants the young to start early, they should emphasize the TFSA, not the RRSP. For more,
see TD's My First RSP here.
Scotiabank: average investor plans to retire at 61
Must be that time of year. While TD was talking up RRSPs for the young, Scotiabank released a study that found 73% of
investors surveyed say the age at which they plan to retire has not
changed despite the uncertain economic and market conditions of the
past two years. However, among the 22% who are pushing back their retirement date due to the
economy, 56% are those who are already closer to retirement
age (45-64). The study also found the average Canadian investor
plans to retire at the age of 61 with 49% saying they
plan to retire before the age of 65. That's up from 43% in
2008.
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Source The Wealthy Boomer : Retirement
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