New study shows 46% of Canadians prioritise current lifestyle over retirement savings
Nearly half (46 percent) of non-retired Canadians prioritize spending on their current lifestyle over saving for retirement, according to IG Wealth Management's annual retirement study.
The study attributes this trend to debt repayment (38 percent) and a preference for enjoying life in the present (18 percent).
Christine Van Cauwenberghe, head of Financial Planning at IG Wealth Management, noted that rising costs and increasing debt repayment challenges frequently impact Canadians’ ability to save for retirement.
She added that their integrated financial planning approach aims to help clients balance present-day enjoyment and financial needs while building a secure path toward retirement.
The study also revealed that only one-third of non-retired Canadians work with a financial advisor. There has been a growing push among benefits providers to add financial services and financial wellness programs to benefits plans as employers look to address these shortfalls.
Among those who do, 76 percent say their advisor helps them balance enjoying life today while saving for retirement, and 91 percent believe the advice is tailored to their needs.
The survey, conducted in partnership with Pollara Strategic Insights, highlights the difficulties Canadians face in planning for retirement due to rising costs, debt, and financial pressures.
Four-fifths (80 percent) of respondents report that the rising cost of living hinders their ability to save, while over half (56 percent) have delayed saving due to financial constraints.
While 47 percent of respondents expect to retire before age 65, one-third anticipate working later to afford basic living expenses, supplement income, or maintain social connections.
Despite these challenges, 38 percent of respondents hope to travel during retirement, 17 percent plan to work part-time or consult, and 33 percent intend to focus on hobbies and personal interests.
On average, non-retired Canadians allocate 12 percent of their income to retirement savings. However, they spend 67 percent on basic living expenses and 20 percent on leisure activities.
Van Cauwenberghe added, “No two retirements are alike. With help from a financial advisor, Canadians can build a personalized retirement plan tailored to their unique needs to help manage today's financial pressures with their desired retirement lifestyle.”
