Saving for retirement can be a bit like trying to get in shape: You need to start slowly, work at it regularly and don't expect to see immediate results.
But like those fad-diet articles that line the checkout aisles, with their countless tips for losing weight, retirement savings options can be overwhelming. And when your tummy's rumbling, it's tempting to just buy a chocolate bar today and put off the diet - or the saving - until tomorrow.
The same psychological barriers that prevent us from shaping up may also be keeping Canadians from bulking up their retirement savings, according to a new report by the BMO Retirement Institute. The report, based on a Strategic Counsel survey of 2,034 Canadians 35 years of age or older, suggests certain behavioural roadblocks, including "paralysis of choice" and "immediate gratification," are creating a disconnect between what Canadians believe they should be doing to prepare for retirement and what they are actually doing.
Almost 90 per cent of Canadians believe retirement planning should begin before the age of 35, according to the poll. Yet 40 per cent of non-retirees admit they have done no retirement planning at all. The problem isn't ignorance, says Tina Di Vito, head of BMO's Retirement Institute. "We know what we need to do, we know when we should do it, we just don't make it a priority."
More than eight in 10 non-retirees who have not started saving said they are more concerned about current needs, such as their mortgages and other debts, than their retirement.
This is particularly true for those aged 35 to 44, who are more likely to say they overspend (53 per cent), have debt (88 per cent) and worry about it (25 per cent). Of that group, half said they felt they had fallen behind in their retirement planning, and 44 per cent said they were dissatisfied with the amount they had saved.
"Clearly, this age bracket represents a period when people are buying houses, paying mortgages and raising children, and the thought of diverting funds to retirement takes a back seat," the report states. "Yet it is also a crucial period of wealth accumulation - a stage of life still far enough away from retirement to permit the magic of compound interest to play its role."
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More than 40 per cent of non-retirees admitted they spend more than they should, saying they wanted the "good things in life." And more than a quarter said they felt they should "eat, drink and be merry" because they may not live to old age.
Lower-income respondents were more likely to report that they felt overwhelmed by too much information, yet they also said they find pension plans, RRSPs and other retirement savings accounts confusing.
"The idea of starting a regular retirement savings program can be overwhelming for many people," Ms. Di Vito said.
As with exercising, however, no pain, no gain. Once you establish a routine, your healthy habit can become second nature.
"The psychology of doing something puts you in the right frame of mind and helps to establish discipline," Ms. Di Vito said. "When you can, increase the amount you set aside. The chances are, if you start something, like contributing to an RRSP, you're going to keep doing it."
For more see Seven Tips on How To Save More Money