A new survey indicates that a considerable number of Canadians feel financially insecure about their retirement savings.
Conducted by the polling outfit Angus Reid, nearly six in 10 Canadians - 58 per cent - report feeling financially unprepared for their retirement, with just one-third indicating they have a retirement savings plan in place that will satisfy their retirement savings goals.
But for some Canadians, retirement isn't chief among their financial concerns, as 31 per cent said it wasn't on their radar screen. This figure jumped to nearly 40 per cent among Canadians between 25 and 34 years of age and surged to 56 per cent for 18-to-24-year olds.
"Saving for retirement can't be an afterthought," said financial expert Peter Aceto. "Despite the amount of debt people are carrying and what we keep hearing in the news, saving is still possible."
One of the reasons why Canadians are carrying so much debt may have something to do with credit cards. The poll found that for 41 per cent of Canadians, getting credit card debt under control was a top financial priority. Other financial issues that took precedence over retirement savings were paying off mortgage debt and saving for their kid's college education.
But among those who are saving for retirement, many are doing so with a retirement savings plan. Furthermore, among those with RSPs, 21 per cent said they contribute between $1,001 and $2,500 each year, with another 16 per cent saving between $501 and $1,000. People looking to evaluate their savings strategies may want to use a retirement savings calculator to see what they should be putting away.
The Angus Reid poll also looked at the top five financial products Canadians invested their RSP funds in. At 57 per cent, more than half put them toward mutual funds, followed by tax free savings accounts at 30 per cent, guaranteed investment certificates at 25 per cent, savings accounts at 20 per cent and individual stocks at 20 per cent.
Something else that can help secure Canadians' retirement are pension plans. But for a sizable number of individuals with these types of plans, savings levels were meager at best in 2011.
According to money management firm RBC Dexia Investor Services, retirement assets invested in pensions rose just 4.2 per cent in the last three months of 2011. For the year overall, average pensions rose just 0.5 per cent.
"It's been a tumultuous year for global markets," said Don McDougall, director of advisory services for RBC Dexia. "We had a natural disaster in Japan, geopolitical tensions in the Middle East, a stubborn U.S. recovery with its ensuing political backlash, sputtering Chinese growth and the ever lingering European debt crisis - most pensions will be pleased it's over."
The value of Canadians' pensions were particularly adversely affected, as equity was the hardest hit asset class, dropping 8.7 per cent. McDougall noted that weakness in the materials, energy and financial sectors accounted for the brunt of the decline.