Impaired means to save lots of has left nearly half unable to place something apart from final yr to this yr for his or her retirement, survey finds
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Elevated interest rates are an ongoing thorn in Canadians’ sides, leaving them watching a “bleak” retirement outlook, based on a brand new survey.
The survey by Abacus Data, on behalf of the Healthcare of Ontario Pension Plan (HOOPP), mentioned dire retirement outlooks proceed to hang-out individuals, with nearly half saying they haven’t been capable of save something for retirement up to now yr, whereas 58 per cent mentioned they fear about not having adequate funds to retire on.
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Even if rates go down “slightly this year,” 61 per cent mentioned they may proceed to influence their means to put aside cash for retirement.
“The results of this year’s survey demonstrate that persistently high interest rates and a rising cost of living continue to have a significant negative impact on Canadians’ ability to save and manage the cost of daily life, threatening their retirement preparedness,” HOOPP mentioned in a press launch.
This is the sixth yr of HOOPP’s survey that asks 2,000 grownup Canadians how they really feel about their retirement prospects, and the image isn’t fairly.
Interest rates have began to fall after the Bank of Canada not too long ago made its first minimize in 4 years to deliver its benchmark lending charge down 25 foundation factors to 4.75 per cent.
Economists at Canada’s massive banks anticipate policymakers are on observe to cut by another 75 basis points to 4 per cent by year-end.
“Over the last few years, we’ve seen Canadians struggle to keep up, first with inflation and now with interest rates and the cost of living,” David Coletto, chief govt of Abacus Data, mentioned within the launch. “But a small cut in interest rates won’t provide enough relief for Canadians.”
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In an indication of how fearful Canadians are about their retirement prospects, 70 per cent say they might quit some of their pay for a greater pension or any pension.
The harder monetary panorama has made retirement only a pipe dream for some, with 13 per cent of non-retired Canadians saying they don’t assume they’ll ever retire and 26 per cent indicating they plan to maintain working after retiring.
In an effort to make retiring a actuality, 42 per cent of individuals — up 4 share factors from final yr’s survey — are relying on the sale of their home to create a retirement nest egg. And 40 per cent of householders aged 55 to 64 — up six share factors — have an analogous plan.
The survey additionally mentioned girls are struggling greater than males to safe their retirement future, with 53 per cent of non-retired girls indicating they haven’t put aside any cash for retirement within the final. yr, in contrast with 45 per cent of males. And 61 per cent of these girls don’t have a deliberate retirement age, whereas 50 per cent of males do.
Women additionally mentioned they’ve much less capability to save lots of, vaulting day-to-day monetary issues forward of retirement.
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Older girls have it even harder, on condition that 62 per cent of non-retired girls aged 55 to 64 don’t really feel ready for retirement, in contrast with 48 per cent of males.
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Economic uncertainty and a rising unemployment rate are making Canadian workers think twice about switching jobs, a phenomenon that has been dubbed “The Big Stay.”
According to Statistics Canada’s latest Labour Force Survey launched on June 7, the job switching charge was simply 0.41 per cent in May. That’s greater than a 41 per cent lower from its 0.69 per cent month-to-month common previous to the pandemic in 2019. — Denise Paglinawan, Financial Post
- Today’s Data: Canadian retail gross sales for April, U.S. present house gross sales, manufacturing and companies PMI
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Today’s Posthaste was written by Gigi Suhanic, with extra reporting from Financial Post employees, The Canadian Press and Bloomberg.
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