To hear the big banks tell it, Canadians dread the thought of retirement and are wringing the hands over their inability to maximize their RRSPs.
However, a recent survey of Globe and Mail readers tells a different story. Of more than 1,700 respondents, 77 per cent said they were actually very confident (39 per cent) or somewhat confident (38 per cent) they would have enough saved for retirement.
One thing these confident savers seem to have in common is a penchant for early retirement planning.
Nick Scott, 27, and his wife, Ashley, 26, are among them. Mr. Scott, a computer company developer, and Ms. Scott, who works in an accounting role, both began saving as soon as they entered the workforce in their early 20s.
By putting aside 20 per cent of their income, the London, Ont., couple have already accumulated a combined $50,000 in registered retirement savings, plus another $50,000 in non-registered employer stocks, and are confident they’ll reach their goal of retiring at age 60, Mr. Scott said.
Part of the impetus for starting early came from watching his in-laws stress over their retirement savings late in life, Mr. Scott said. They both worked in auto manufacturing, which took a major hit during the financial crisis.
“They always believed that they would have gold-plated pensions. It was pretty shaky the last couple of years, never knowing whether those companies were going to survive and whether those pensions were going to be there for them,” Mr. Scott said.
“We don’t want to put ourselves in that position. Even though we do have fairly good benefits through our workplaces, we’re not betting on the employers being able to provide for us when we’re retired.”
An early start on retirement planning can help Canadians avoid anxiety later in life, said Laurie Peterkin, associate director of Peterkin Wealth Advisor Team in Toronto.
When you start saving early, your investments have a long time to compound, which means there’s less need to rely on risky investments for high returns, says Ms. Peterkin.
Also, there’s an emotional benefit to starting early. “It does give them that feeling that they have control over their lives,” Ms. Peterkin said. “It gives them a feeling of empowerment.”
Asked what age they had started saving for retirement, 45 per cent of the Globe’s survey respondents said they began before they were 30; another 28 per cent started in their 30s. Only a quarter of respondents waited until they were 40 or older.
“What a lot of people don’t realize is that retirement planning doesn’t start when you’re 45,” Ms. Peterkin said. “It really does start in your 20s, the minute you finish school. That’s when you’re embarking on your future.”
A quarter of Globe respondents said they expected to live “very well, with money to spare” in retirement; another 59 per cent said they should be “fairly comfortable.” Only 10 per cent of respondents expected money in retirement to be “tight,” and 5 per cent said it would be “tough to make ends meet.”
Half of respondents said they would live more comfortably in retirement than their own parents had and a third expected a similar standard of living. Only 15 per cent expected to be worse off than their parents.