A majority of Canadians are misguided when it comes to understanding how much they will need to save to reach their retirement goals, according to a new study from IG Wealth Management.
Despite the rising cost of living, almost two-thirds of Canadians (63%) still believe $1 million in savings is enough to retire comfortably, the study found.
“It’s surprising that so many Canadians believe $1 million in savings is enough for retirement, considering many don’t know what their cost of living will be once retired,” said Christine Van Cauwenberghe, head of financial planning with IG Wealth Management.
One-third of respondents (33%) said they do not know what percentage of their current income they would need to cover expenses in retirement. Further, two-thirds of Canadians said they are concerned about the impact a recession in 2023 will have on their financial situation and are aware that their cost of living could increase in retirement.
Almost six in 10 (59%) gen Z respondents said they haven’t started saving for retirement; roughly one in three (31%) millenials said the same.
In terms of investment vehicles for retirement, nearly half of Canadians (44%) believe they can retire comfortably just by focusing on investing in an RRSP.
However, an RRSP is just one piece of the retirement planning puzzle, Van Cauwenberghe said.
“Unfortunately, people are often misguided by outdated information and may not be getting the full retirement planning help they deserve,” said Van Cauwenberghe.
“With lifestyle expenses and the added concerns surrounding the impact of inflation on financial plans, particularly retirement, Canadians need an individualized retirement plan to determine the number that will meet their unique needs.”
The study was commissioned by Winnipeg-based IG Wealth and conducted in partnership with Pollara Strategic Insights with an online sample of 1,507 non-retired Canadians 18 and older between Jan. 4 and Jan. 10.