Retirement savings wakeup call

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While almost seven in ten current Canadian retirees say that in retrospect they should have saved for retirement for at least 25 years, a poll finds 15% of those still working will spend less than five years saving for retirement and 6% don’t plan to save at all.

Talk about a disconnect! Not surprisingly given these dismal efforts, the TD Retirement Realities Poll finds many still working plan to do so longer than current retirees did during their careers. The poll, released today, finds 64% of working Canadians expect to retire in their 60s. However, more of them (36%) expect to do so after the traditional retirement age of 65, versus just 28% who are shooting for their early 60s. And a surprising number — 16% — expect to keep slogging it out well into their 70s. Only 3% of current retirees kept it up into their 70s, with 36% leaving full-time work by their late 50s and 25% by their early 60s.

The poll of 2,407 conducted by Environics Research focused on Canadians 25 years old or more, split between 1,251 workers and 929 retirees. More than 60% of the former said they won’t save for retirement for as long as the latter group recommends. When today’s retirees were asked how long they thought they should have saved for retirement, a whopping 69% said at least 25 years.

25 years should be the absolute minimum saving timeframe

Studies I’ve seen in the past typically use 25 years as an absolute minimum, and given the trend to greater longevity, it’s arguable that 30, 35 or even 40 years is more realistic. One thing for sure, a mere five years isn’t going to do it. If you’re in that camp, you’re making a big bet on living solely on government benefits in old age. In that case, check out Julie Cazzin’s Retire in Luxury on Next to Nothing feature in the November issue of MoneySense for a list of places in the world where you can live solely on CPP and some combination of OAS and GIS.

But if you do plan to save only for a short time, you may as well focus on the TFSA. See my earlier blog for more on that.

Click here for the full infographic on TD’s full findings.

8 comments on “Retirement savings wakeup call

  1. Sorry, a mere $5500 a year TFSA isn't going to cut it for retirement. Here's a massive assumption these delusional people are making: That they're going to be healthy enough at 70 and that people are actually going to want your bumbling, wrinkled, old butt hanging around the workplace. I'm betting that the people who think they can stay in their current place of work until after 65 are going to be pushed out.

    I have a question for those who are in that age bracket and haven't saved a cent: What the hell did you do with your money all these years?!! Spend it on stupid stuff?

    Reply

    • I am 69, female and am a long way from being a bumbling, wrinkled old butt! I would sooner be working at something I love, because if I was not I might be all of the above. Working keeps me fit, energized, alive and more. I imagine you must be very young to make such a crap of a comment. I do agree with you 100% about the TFSA. I've had this argument with many people of the last 25 years. Anyone with a good mind can invest 10% of their earned income in open accounts. Altho it is true that our society adores the young, they do not have the wisdom of the old!!!

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      • Of course they're not *all* bumbling, old, butts. ;)
        But there's nothing worse than working with someone you know has already mentally checked out at the office and is just sitting around waiting for their retirement date. …Those folks who should've been gone years ago but it wasn't optimal pension yet or they hadn't saved enough.
        People who think they'll be wanted in the workforce at 70+? Or that it will even be an option with their employer? No. They certainly can't count on that.

        Reply

  2. Much of the advice current retires have will not be relevant to pre-retirees. The past is not a guide for what is coming in this age of exponential change.

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  3. I've saved for 30 years. Stock market wiped out 40 percent in 2007. It still hasn't returned to my highlevel mark. My pension was stolen from a company that went bankrupt. The only thing that has really saved me is I never spent money other than to pay off my house. This lifestyle was extremely frustrating for my wife who didn't share my sense of personal responsibility. Nearly caused a divorce. We live in a society, and as such, we should help one another. Health care, pensions and education are the three big ones in my books. DB pensions should be universal to all citizens. Pooling resourses are important for pension longevity. Letting individual save for it all is a disaster waiting to happen. Further pension should not be tied to the fortunes of companys. But all companies should pay into them that are part of society and have responsibilities too—no exceptions. DC pensions should be outlawed as the scorge that they are…..

    Reply

    • There are many advantages to a DC plan as oppossed to a DB plan. One is when you die whatever is left goes to your spouse, the full amount, not 60% as in a DB plan. If you have no spouse the balance after tax goes to you estate or benrficiary. If you have no spouse your DB plan dies with you.
      The only organization capable of guaranteeing a DB plan is government and they already run two for you, the old age pension and the CPP. You need to take some responsibility for yourself.

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  4. A lot of doom and gloom here . I suspect, more than not having the financial where for all to retire many people are afraid to retire. The fact is you need less money than many experts ( financial planners , et al ) tell you. There are many people who wait so long to retire , that unfortunately they are retired by death , not financial inadequacy.

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  5. Planning for retirement today will help you meet your retirement goals for tomorrow.Whether your retirement is decades away or just around the corner, it's never too early, or too late, to start saving for your retirement.The Retirement Savings section of provides a summary of eligibility, coverage, vesting, retirement options, payment options and other subjects related to retirement savings.

    Reply

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