Most Canadians can’t afford to save more for retirement

By Special to MoneySense on July 13, 2015
Estimated reading time: 2 minutes

They'd rather top up RRSPs, TFSAs vs. CPP if they had the option

As Canada’s premiers prepare to meet in St. John’s this Wednesday, new data shows that most Canadians can’t afford to save more for retirement, and wouldn’t put any extra money into the CPP or QPP if they could. According to a new public opinion poll conducted by Ipsos-Reid for the Canadian Federation of Independent Business (CFIB), almost 60% of working Canadians report they can’t afford to save more than they already do. When asked how government could best help them save, only 18% point to mandatory increases in CPP/QPP. A similar 19% say they would voluntarily invest in the CPP/QPP. “No matter how you ask the question, fewer than one in five Canadians supports putting more of their hard-earned money into the CPP or QPP,” says CFIB president Dan Kelly. “Premiers need to know that Canadians would choose to put any extra money for retirement savings in to TFSAs, RRSPs or private investments over any increase in CPP/QPP.” Canadian employees identified reducing government spending and taxes (39%) and creating new incentives to save (37%) as the best ways for government to help. The same questions were put to small business owners, and again CPP/QPP hikes were ranked near the bottom (5%) among options to boost retirement savings. If a mandatory CPP/QPP hike were introduced, over one-third of Canadians say they would be forced to reduce spending on essential items such as rent or food. Two-thirds of business owners would be under increased pressure to freeze or cut salaries and over one-third report they would be forced to cut staffing in their firms. “A mandatory payroll tax hike hurts everyone. It would be a significant barrier to economic growth and a job-killer,” he adds. “CFIB members do support allowing voluntary additional contributions to the CPP/QPP for Canadians who do favour it as a retirement savings vehicle.” This article originally appeared on benefitscanada.ca.