Faced with low interest rates, a low-value loonie and volatile markets, Canadians are making saving for the long-term—including retirement—their top financial priority (54 per cent) for the third year in a row, according to the RBC Financial Independence in Retirement Poll.
Saving for a rainy day ranked second at 46 per cent, with regular payments to reduce or eliminate debt ranked third at 42 per cent.
This trio of financial priorities matches the concern expressed by a majority (75 per cent) of Canadians: How to balance saving for today versus putting away money for tomorrow.
Two of the age groups most concerned about finding this balance: those aged 18-29 (86 per cent) and 40-49 (79 per cent).
These two age groups also are the most likely not to have a financial plan (61 per cent and 59 per cent respectively), compared to the Canadian average (51 per cent).
“Our consumer research tells us there’s a direct link between having a financial plan and feeling more comfortable about your future – a plan can be a big stress-reliever at any age and helps you focus on what’s truly important to you,” explained Richa Hingorani, senior manager, financial planning support, RBC.
“This is a great way to make your dreams a reality. By exploring your short-term and your long-term goals with a financial planner, you can set up those goals, check each one off as you reach it, celebrate your achievement and move on to your next goal.”
Hingorani describes a good financial plan as a written report that:
• Addresses your personal goals, needs and priorities
• Covers your current situation
• Includes financial planning areas that are relevant to you – such as taxes, investments, cash flow, retirement, borrowing and debt management
• Evaluates the strategies that will help meet your goals
• Lists action steps – what needs to be done, by whom and when
• Acts as a guidepost to track your progress
Other findings from this year’s poll included:
•· If Canadians could only contribute to one option, 46 per cent selected TFSAs and 28 per cent selected RRSPs (compared to 43 per cent and 32 per cent respectively in 2015).
• 55 per cent of Canadians own RRSPs (unchanged from 2015).
• 38 per cent of RRSP owners have made or intend to make contributions (37 per cent in 2015).
• 31 per cent have not started saving for retirement (30 per cent in 2015).
• Of those saving for retirement, 50 per cent use automatic savings plans and 39 per cent save “whenever I can” (compared to 44 per cent and 39 per cent in 2015).