Younger Canadians are more optimistic about their retirement and ability to save, but are less likely to be taking action
TORONTO, June 2, 2014 /CNW/ - A CIBC (TSX: CM) (NYSE: CM) poll conducted by Nielsen finds that Canadians aged 18-24 - typically the age group where people enter the workforce - are 10 times more likely to be optimistic that they will live better in retirement than people aged 55-64 - the age group who either are close to or retiring from their jobs. The poll found that Canadians' expectations fall dramatically the older you are.
Key findings of the poll include:
- 30 per cent of Canadians aged 18-24 say they expect to live better in retirement than they do today, a number that falls to 17 per cent for 25-34 year olds
- Expectations continue to drop with age, with only 3 per cent of those aged 55-64 thinking they will live better in retirement than they do now
- Despite their optimism, younger Canadians are less likely to have started saving - 40 per cent of 18-24 year olds, and 23 percent of 25-34 year olds, say they have not yet started saving for retirement, compared to just 16 per cent of Canadians overall
The poll results suggest that although younger Canadians are positive about their future retirement plans, they may be relying too much on time to meet their retirement goals and not taking necessary actions now that could help them realize their goals.
"Time is on the side of younger Canadians who have many years to retirement, but that's only an advantage if you take action and use those years to start accumulating savings," says Christina Kramer, Executive Vice President, Retail and Business Banking, CIBC. "While it's not surprising that younger Canadians are optimistic about how they expect to retire, the fact that so many people nearing retirement aren't as hopeful speaks to the importance of having a financial plan in place earlier on."
The best time to start is now
The poll also revealed that the majority of Canadians (58 per cent) believe it is still possible to put money away each month and retire in their 60s, particularly 18-24 year olds (71 per cent), and to a similar extent, 25-34 year olds (68 per cent).
This is a positive finding, according to Ms. Kramer. "Considering how often we hear talk of the increasing cost of living, it's good news that so many Canadians, especially younger people, still think saving for retirement is achievable," she says. "The key is to make a plan and take steps to begin saving - the sooner you start putting money aside and earmarking it for your retirement, the longer you'll have for your money to grow."
Advice for focusing on retirement savings
- Talk to an advisor - Meet with an advisor to understand your options, and work with them to develop a plan that can help you in managing multiple financial priorities and staying on track over the long term.
- Contribute regularly - Set up a regular investment plan to automatically withdraw smaller amounts throughout the year, rather than trying to find the funds for a large lump payment at the deadline.
- Don't lose sight of the longer term - While it is important to address immediate financial needs such as debt reduction or saving for a large purchase, it is equally important to keep future goals such as retirement in sight.
KEY POLL FINDINGS
Percentage of Canadians who expect to live better in retirement than they do today, by age:
Percentage of Canadians who haven't yet started their retirement savings, by age:
Percentage of Canadians who believe it is still possible to put away some money each month and retire in their 60s, by age:
Each week, Nielsen interviews approximately 1,000 Canadians through teleVox, the company's national telephone omnibus survey. These results were gathered from a sample of 1,734 RRSP-eligible Canadians between December 5 and 16, 2013. A sample of this size has a margin of error of +/-2.35%, 19 times out of 20.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.
Caroline Van Hasselt, Director, External Communications, 416-784-6699 or firstname.lastname@example.org