For many Canadians, the ‘golden years’ are now a more distant dream. They are struggling to save for retirement and to make ends meet.
According to the third annual survey of employees conducted by the Canadian Payroll Association (CPA), 40 per cent of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40 per cent) was “I’m not saving enough money for retirement.”
Living pay cheque to pay cheque
A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57 per cent saying they would be in financial difficulty if their pay was delayed by even a week.
The numbers were even higher for younger Canadians aged 18 to 34 (63 per cent ) and single parents (74 per cent). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60 per cent) and the Atlantic provinces (64 per cent), which may be the result of their slower recovery since the last recession.
Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund.
CPA press release