It has been said — and sung — that what goes up, must come down. Just don’t mention this to the growing number Canadians who are finding it extremely difficult to save for retirement amid skyrocketing inflation and interest rates.
In a new survey by BDO Canada, 71 percent of Canadians say that saving for retirement has become a major — and in some cases insurmountable — challenge. The survey also found that:
- 43 percent of Canadians have cut their savings for retirement.Aqua Gradient Retirement Plan Insurance Instagram Post
- 67 percent of Canadians aged 18-24 have no retirement savings at all.
- 33 percent of Canadians have abandoned the idea of ever being able to retire/fully-retire.
“[The findings] highlight the increasing proportion of Canadians who are struggling to keep up financially,” commented Nancy Snedden, National Leader of BDO Debt Solutions. “With inflation and rising costs, affordability challenges have returned to, and in some cases, surpassed pre-pandemic levels. It’s concerning to see that Canadians are experiencing more financial difficulties today compared with the last three years.”
Workers across Canada are not the only ones worried about their finances. A separate survey by the Healthcare of Ontario Pension Plan (HOOPP) found that employers are especially concerned with their employees’ mounting financial stress.
“Current inflationary pressures are understandably leading many employers and workers to prioritize cash in hand, even as they recognize the short and long-term value of retirement benefits,” commented Steven McCormick, SVP, Plan Operations, HOOPP. “It is arguably more important than ever for leaders — in business, government and the retirement industry — to take measures that will help workers save for retirement, even when it’s challenging to do so.”
Free Online Resources to Save for Retirement
On a practical level, the barrier that many organizations — particularly smaller ones — face, is that they do not have the training budget or resources to help employees boost their personal finance IQ. That’s the bad news. But the good news, is that there are several FREE online resources available, including:
- McGill’s Personal Finance Essentials Course
- The Financial Consumer Agency of Canada “Your Financial Tooklit” Program’
- CPA Canada’s Financial Literacy Sessions (multiple available)
- BDC’s Financial Fundamentals Course
- Credit Counseling Society’s Courses (multiple available)
Employers are encouraged to share these resources with their employees, so they can debunk myths (including some that can be extremely costly and life-changing), and get the facts they need on key topics such as: TFSAs, RRSPs, budgeting, saving, inflation, banking, debt, borrowing, tax planning, investing, real estate, retirement planning, and more.
The financial well-being of working Canadians has fallen sharply, and is at its lowest point since January 2021. Employers who connect their employees to free learning opportunities such as those suggested above can play a helpful role at a critical time, and make things at least a little bit — and potentially a lot — better.