One-fifth of Canadians plan to retire by age 60 — a number that increases to 28 per cent for people aged 18 to 34 — but few have the financial habits to support early retirement, according to a survey from ING Direct.
Two-thirds (65 per cent) of the 1,008 respondents said they either don't have a retirement savings plan (RSP) or did not make any contributions to their RSP in 2012.
In addition, two-thirds of Canadians (65 per cent) are worried about their financial well-being during retirement and many admit to not even having an RSP, according to the survey. When asked what concerns them most about their impending golden years, 56 per cent said not having enough income to sustain a good quality of life, while 13 per cent are afraid of still having debt.
Despite their concern, nearly one-half (48 per cent) of the respondents don't have a financial plan in place. Why? It’s not a priority (24 per cent), people don’t feel knowledgeable enough to create a financial plan (18 per cent) or they don’t have the right tools to create a plan (17 per cent).
"While paying off debt and saving for other goals, like a child's education, are important priorities, they're often done at the expense of saving for retirement," said Peter Aceto, president and CEO of ING Direct. "You need to strike a financial balance so that contributing to an RSP isn't overlooked. By starting early, even if it means starting small, you can feel confident that you're taking care of your financial future."
In addition to the financial implications of neglecting retirement savings, Canadians admitted it's also taking a toll on their emotional health. More than one-quarter (26 per cent) of those who did not make RSP contributions in 2012 described themselves as feeling concerned, stressed or anxious, hopeless or overwhelmed about it.
About one-third (35 per cent) of respondents who plan to retire and have an RSP said they have money automatically transferred to an RSP account on a regular basis. One in 10 say they make one lump sum to their RSP accounts during RSP season (January to February) while six per cent deposit one lump sum at some other point during the year.
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