I don’t find it all that surprising that a recent study found that a majority of Canadians in their early to mid-40s are not saving enough for their retirement. While we have debated many times in the past how much of a nest egg is needed in retirement and vigorously disagreed when the financial industry suggested it to be a million dollars or more, even the lowest estimates run to at least a few hundred thousand dollars plus a fully paid-off home.
According to the StatsCan Wealth of Canadians survey, 27% of Canadian families in the 35 to 44 age group have no pension assets of any kind. The median value of all pension assets for a family unit in the same age group is around $50,000. The picture is the same with RRSPs with the median value at $22,500 and the average value at $49,100 and again suggests that while a minority is saving well, the vast majority are not. The report mirrors the findings of the recent study:
Private pension assets were concentrated in nearly one-third of family units. About 31% of family units with $100,000 or more in private pension savings held 90.3% of the value of these assets.
Related:
- Jonathan Chevreau’s column in the Financial Post
- Blog posts by Canadian Dream, Canadian Financial Stuff and Canadian Financial DIY.
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7 responses so far ↓
1 Big Cajun Man // Jun 15, 2007 at 3:13 pm
But where is the actual survey? All I get are interpretations and commentaries on the actual survey, but I can’t find it anywhere.
Oh and I did a bit on this today as well
2 Canadian Capitalist // Jun 15, 2007 at 4:32 pm
I’ve updated with a link to your post. I’ve requested them a copy of the study, so we’ll see. Can’t say I am surprised at the conclusions though.
3 Canadian Capitalist // Jun 15, 2007 at 6:40 pm
I have a copy of the report. It is 12 pages long and I will post the highlights later this evening.
4 FourPillars // Jun 15, 2007 at 7:18 pm
I’m just not sure how much you can read into any of these statistics. I’m sure there are a lot of people who should be saving more but things like average RRSP don’t necessarily mean a whole lot.
I think the relevant factors for determining what kind of retirement someone is going to have is their age, current portfolio, expenses, future contributions, returns, current debt and payment plans.
Some 40 year olds don’t have much of an rrsp because they are trying to pay down the mortgage. Some have a good rrsp but also have a lot of debt. Some people don’t make much money to begin with and can’t save much and will probably be eligible for GIS which along with CPP & OAS should allow them to maintain a decent standard of living. Lumping them all together just gets you some meaningless statistics and a nice headline for the business section.
Mike
5 Canadian Capitalist // Jun 15, 2007 at 10:10 pm
Mike: You are right about averages not telling you much. But median is a significant statistic and comparing it with the average tells you something about the distribution. A 40-year old who has not saved anything for retirement isn’t in dire straits. But if the study shows that they should start saving now, I don’t see how that is a bad thing.
6 Terry // Jun 16, 2007 at 11:46 am
I’d be interested the stats for 60-65 year olds, if you ever come across them.
7 Canadian Capitalist // Jun 18, 2007 at 3:11 pm
Terry: Check out the Wealth of Canadians survey available on the StatsCan website. It has lots of stats for the 55 to 64 age category.
Link
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