Despite making retirement savings a priority to start the year, almost one-third of boomers see themselves missing their savings goals in 2011
TORONTO, July 12, 2011 /CNW/ – Boomers started 2011 with good intentions to put more away for retirement. However as the warm weather signals the mid-point of the year, many don’t feel they are delivering on their 2011 goals when it comes to building their savings.
In a recent CIBC poll conducted by Harris-Decima, almost one-third (30 per cent) of respondents aged 45-64 felt they were doing a poor job of building their savings so far in 2011, including 17 per cent who rate their progress as “very poor”. Overall, less than half of boomers surveyed (42 per cent) believe they are making good progress in building their savings so far in 2011.
These results suggest boomers are not placing enough emphasis on an area they cited as their primary focus at the start of the year. In a survey of Canadians’ top financial priorities for 2011 released by CIBC in January, boomers were the most likely to say that planning for their retirement was their top financial priority. Yet, the most recent CIBC/Harris Decima poll shows that just over half of boomers are proactive when it comes to building their savings:
- Only 53 per cent have a regular savings plan in place where they automatically put money away each month
- 58 per cent have a budget in place for themselves that they track each month
- 61 per cent have met with an advisor in the last 12 months
“While boomers have taken the important first step of identifying retirement as their top financial priority, some don’t feel confident about the progress they have made when it comes to building their savings so far in 2011,” commented Christina Kramer, Executive Vice-President, Retail Distribution and Channel Strategy, CIBC. “Savings is clearly a priority for Canadians who are approaching retirement, and seeing only half of Canada’s largest demographic with a regular savings plan in place suggests a significant opportunity for more boomers to start saving on a regular basis.”
The good news is there is still time to get back on track before the end of the year. Survey results indicated that simple steps can lead to feeling better about your progress in building your savings:
- Putting money away as part of a regular savings plan makes a significant difference in building savings over the long term. Among boomers who feel they have made good progress in building their savings so far in 2011, 70 per cent have a regular savings plan in place. Among those who feel they have done a poor job of building their savings in 2011, only 32 per cent have a regular savings plan.
- Meeting with an advisor who can guide your savings efforts and help you structure your finances was also identified as important in the survey. Boomers who were positive about their savings progress were likely to have met with an advisor, with 72 per cent saying they had met with an advisor in the last 12 months. Among those who feel they have done a poor job of building their savings in 2011, only 48 per cent had met with an advisor.
“There’s a clear link between feeling positive about your savings progress so far this year and certain key activities like having a regular savings plan in place, or meeting with an advisor to discuss your overall financial picture,” added Ms. Kramer. “Meeting with an advisor can help to ensure your savings are on track to meet your income targets in retirement.”
Ms. Kramer also believes there is an opportunity for those already saving regularly to ensure they review their plans on an ongoing basis.
“Even among boomers who have a regular savings plan in place, the financial strategy they created a number of years ago may need to be updated, including the amount they are putting away each month as they near retirement,” she says.
Ms. Kramer adds that once boomers have established a regular savings plan with their advisor, they can begin to look at the broader investment options that may be right for them to optimize retirement income, such as deciding how to utilize TFSAs versus RRSPs and other options.
Boomers’ evaluation of their progress towards their savings goals thus far in 2011:
Very Good – 14%
Good – 28%
Fair – 26%
Poor – 13%
Very Poor – 17%
Percentage of boomers who have consulted with a Financial Advisor in the last 12 months, regionally:
Atl. – 53%
Que. – 59%
Ont. – 63%
Alb. – 64%
B.C. – 59%
Percentage of boomers who have a regular savings plan in place where they automatically put money away each month, regionally:
Atl. – 49%
Que. – 51%
Ont. – 57%
Alb. – 51%
B.C. – 52%
Regional perspective of boomers who have a monthly budget in place that they track each month:
Atl. – 72%
Que. – 60%
Ont. – 62%
Alb. – 46%
B.C. – 45% http://www.cnw.ca/en/releases/archive/July2011/12/c4643.html