“The Math Isn’t Good” – Only 45% Of Canadians Over 50 Have Saved Even 25% Of Their Ultimate Retirement Goal

“A recent Canadian Payroll Association (CPA) study found that 45% of aged 50+ participants had saved 1/4 of their ultimate retirement goal. With 3/4 of their working years behind them and less than 1/4 saved towards retirement, the math isn’t good.
Low interest rates have been tempting to all Canadians, and the 50+ group has unfortunately been no different. In fact, according to Statistics Canada, about 2/3 of working Canadians over the age of 55 have debt and about 1/3 of Canadians still have debt even after retirement. And while their indebtedness has grown in a low-rate world, has stock market volatility created an environment of investor apathy where spending has become more attractive than investing? … Low rates are having a pretty significant cultural impact on us and perhaps more specifically on the Baby Boomer generation.”

– from ‘How low rates have changed us’, Jason Heath, G&M, 8 Sep 2012

4 responses to ““The Math Isn’t Good” – Only 45% Of Canadians Over 50 Have Saved Even 25% Of Their Ultimate Retirement Goal

  1. Putting this into context really depends on what “ultimate retirement goal” is. I’m nowhere near my “ultimate” retirement goal, but with a paid for home and low 7-figure investment portfolio, I would be comfortable in retirement.

    This is a good reason why BofC is going to have to raise rates soon. There is a cultural, and economic, impact for a lot of people and businesses in this environment.

    • I would judge that the word ‘ultimate’ has been used here in the “final” sense, rather than the “dream” sense.

      Your “comfortable” goal in retirement (paid for home and $1M-plus investment portfolio) is also a sensible one. But that’s the problem… what percentage of Canadians in their 50’s are heading for such a set up? I’d venture a small minority; perhaps very small. Anyone out there who can give us the percentile? What percentage of Canadians will retire with paid for home plus $1M-plus, or better?

  2. My retirement goal is to have enough of an egg that I can keep it in equities that pay eligible dividends and real estate that generates cash flow. But that isn’t so much a retirement goal as an intergenerational wealth building plan. And hey, when the high grade bond bubble bursts, I’m willing to allocate capital there.

    But a seven figure portfolio plus a paid for residence isn’t exactly a “die broke” strategy either, given most peoples’ retirement spending habits.

    It used to be that youth was wasted on the young, and money on the old. But with this credit bubble, the boomers have gotten their wish of living richly before they were rich. With that demand having been pulled forward, as it were, most of them aren’t going to be taking annual Caribbean vacations at the helm of their 35′ sailboats. They won’t be eating cat food either, but this ain’t Lake Woebegone — their retirement lifestyles are going to be very average.

  3. I guess 1M+ and a paid residence are for one family , which seems quite resonable .

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