CIBC Survey Reveals Canadians’ Struggles with Retirement Savings
Discover the financial challenges faced by Canadians in saving for retirement, as revealed by a recent CIBC survey. Many are delaying retirement savings due to immediate financial pressures.
A recent survey conducted by the Canadian Imperial Bank of Commerce (CIBC) has shed light on the financial challenges faced by many Canadians when it comes to retirement savings. According to the survey, a significant number of Canadians are putting off saving for retirement due to immediate financial pressures, despite their desire to retire by the age of 60.
The survey revealed that over half of Canadian investors are prioritizing their current bills over future savings, as they grapple with the rising cost of living. This shift in priorities has led to a preference for tax-free savings accounts (TFSAs) over registered retirement savings plans (RRSPs). In fact, 53 percent of investors with both an RRSP and TFSA expressed a preference for the latter, citing its flexibility and tax-free access to funds as key advantages.
Conversely, RRSPs, which impose restrictions on access and tax withdrawals, have become less favored, with one-third of RRSP holders not planning to make contributions by the upcoming deadline. The survey also indicated a move towards more conservative financial strategies, with 42 percent of respondents seeking predictable returns rather than high growth, reflecting concerns over an uncertain economic environment.
In the face of inflation, higher interest rates, and recession fears, Canadians are reportedly spending 17.7 more hours worrying about their finances compared to the previous year, according to research by the Bank of Nova Scotia. Despite these financial concerns and changing savings behaviors, the majority of Canadians still aim to retire around the age of 60. However, more than half are either unsure if they can afford to save for retirement or are certain they cannot, with 57 percent fearing they will run out of money in old age. Additionally, higher inflation has forced one-third to delay their retirement plans.
In related news, the start of the year saw a rise in US consumer prices, which may impact the broader economic outlook and potentially influence individuals' financial planning and savings strategies. The core consumer price index, excluding food and energy costs, rose 0.4 percent from December, marking the most significant increase in eight months and maintaining a year-on-year advance of 3.9 percent. This development suggests that the US Federal Reserve may delay lowering interest rates, further complicating the financial landscape for Canadians.
The survey by CIBC highlights the challenges faced by Canadians in balancing immediate financial pressures with long-term retirement savings goals. The shift towards TFSAs over RRSPs, as well as the move towards more conservative financial strategies, reflects the impact of economic uncertainty on individuals' financial planning.
CIBC Survey Reveals Canadians’ Struggles with Retirement Savings
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