TD survey finds that 78 per cent of Millennials are not
saving for retirement because they don't earn enough
TORONTO,
Nov. 25, 2015 /CNW/ - According to a
recent TD survey, younger Canadians have big dreams for their
retirement years - whether it's travelling, buying a vacation
property or starting a business - but most recognize they're not
saving enough to turn those dreams into reality.
While more than half of Millennials (57 per cent) surveyed would
ideally like to retire by the time they turn 60, only a quarter (27
per cent) think that's a realistic possibility, with most (70 per
cent) expecting to have to work well into their 60s or even their
70s, according to a recent TD survey. The survey also found nearly
60 per cent of Millennials want to take their first big trip when
they're retired, and Millennials are more likely than any other age
group to want to buy their first vacation home after retiring (25
per cent vs. the national average of 13 per cent,
respectively).
"It's important to start saving as early as possible to help
ensure you can retire when you want and be able to live the
lifestyle you've planned," said Lee
Bennett, Senior Vice President, TD Wealth Financial
Planning. "Whatever your retirement goals may be, start by putting
each of them in order of importance and assigning a timeframe,
which will help you build a savings plan. Think of what you'd
regret most if you couldn't afford it when you retire and build a
road map that will help get you there."
The survey notes Canadians under the age of 34 are the least
likely to be thinking about or putting money aside for retirement,
with just over half (52 per cent) surveyed making contributions to
their retirement savings, compared with more than two-thirds (69
per cent) of those aged 34 to 50 and 64 per cent of those in their
50s and 60s.
Linda MacKay, Senior Vice
President, Retail Savings and Investing at TD Canada Trust, adds
that Millennial Canadians are the most likely to say they're not
saving for retirement because they don't earn enough or because
they're saving for other, more immediate, things. She notes that
with a little bit of know-how they can start building up a
retirement fund.
"Some employers may offer a form of employer-matching of
contributions to a personal retirement savings plan, and younger
workers should be taking full advantage of these programs as they
are among the best ways to save for retirement," said MacKay.
"Canadians should also consider setting up an automated savings
plan to regularly transfer funds into retirement savings accounts.
A few dollars on a regular basis can quickly add up to a nice sum
of money down the road."
According to the TD survey, more than one-third (36 per cent) of
Millennials don't know whether their employer offers to match
employee contributions to an RSP. And where companies do offer to
match some or all of the employees' RSP contributions, only 58 per
cent of Millennials are taking part in the program, compared with
three-quarters (77 per cent) of Gen-X Canadians and 87 per cent of
those aged 51 and older.
"If you don't know what retirement savings options your employer
offers, you might be missing out on money that could help you to
retire at a time of your choosing, so you can do the things you've
always wanted to do," MacKay said. "And if you find out that you
don't have a company retirement savings option there are lots of
personal savings plans you can choose from to fit your budget and
specific needs."
MacKay offers the following additional tips to help you get
started saving for retirement:
- Set up an Automatic Savings Plan that automatically
transfers funds into your retirement savings. Start with a small
amount you can easily afford, and then increase it as your income
goes up or your spending goes down.
- If you receive a bonus or other unexpected income, it is
alright to set aside a small amount to treat yourself, but you
should consider putting the bulk of the extra money into your
savings.
- Consider which product works best for you - a Retirement
Savings Plan (RSP) will help to reduce your taxable income, and
the growth earned is non-taxable as long as it remains in the RSP.
A Tax-Free Savings Account (TFSA) allows your savings to
grow tax free, and you don't pay taxes on the investment income or
growth earned in a TFSA, even upon withdrawal.
- Look for accounts with perks. For example, TD's Simply
Save feature enables you to automatically transfer a selected
amount of money into your savings account each time you use your
debit card, offering an easy way to save for the future without
having to change your routine.
- Need some professional know-how? Talk with a financial
advisor about your retirement plans and the best options to
help you get there.
For more tips on how to save, or to book an appointment online,
visit tdcanadatrust.com.
About the TD Changing Face of Retirement Survey
The TD Poll surveyed 2,115 respondents 18 years or older (of which
613 were between 18-33 years of age and considered Millennials)
from across Canada and was
conducted using an online methodology by Environics Research
between Friday, October 30th and
Thursday, November 5th, 2015.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than
11.5 million customers. We provide a wide range of products and
services from chequing and savings accounts, to credit cards,
mortgages and business banking, plus credit protection and credit
travel medical insurance, as well as advice on managing everyday
finances. TD Canada Trust makes banking comfortable with
award-winning service and convenience through 24/7 mobile,
internet, telephone and ATM banking, as well as at over 1,100
branches, with convenient hours to serve customers better. For more
information, please visit: www.tdcanadatrust.com. TD Canada Trust
is the Canadian retail bank of TD Bank Group, the sixth largest
bank in North America.
About TD Wealth Financial Planning
TD Wealth Financial Planning is a division of TD Waterhouse Canada
Inc., a subsidiary of The Toronto-Dominion Bank.
SOURCE TD Bank Group