Sun Life finds many Canadians pausing retirement savings to focus on tax-free savings accounts instead
The rising cost of living is making retirement less attainable for many Canadians, as reported by the Financial Post.
According to a recent Sun Life Financial Inc. report, 75 percent of Canadians feel that the cost of living has negatively impacted their retirement savings. Additionally, about half of the respondents worry that they do not have enough saved for retirement.
Eric Monteiro, senior vice-president of Group Retirement Services at Sun Life, emphasized the importance of retirement planning.
“Planning can significantly affect someone’s ability to retire. Considering what you want your retirement to look like and building a roadmap to get there is essential,” he said.
Many Canadians are prioritizing essential expenses over retirement savings. A February survey by the Canadian Imperial Bank of Commerce found that 53 percent of Canadians have paused their retirement savings to focus on growing their tax-free savings accounts, which offer more flexibility.
Furthermore, a third of respondents do not plan to make any registered retirement savings plan (RRSP) contributions this year.
The financial strain is not limited to those saving for retirement. A recent TransUnion survey revealed that 48 percent of respondents feel their finances are worse than expected, with 30 percent struggling to pay their bills and loans in full.
The Angus Reid Institute’s Economic Stress Index shows that 32 percent of Canadians fall into the “struggling” category, with housing costs being the primary source of financial stress.
Sun Life also highlighted the benefits of being digitally engaged with retirement savings. Those who log into an online retirement account at least once a year have an average balance that is 230 percent higher and contribute 61 percent more to their accounts.
Monteiro noted, “It’s important that people not only prepare for retirement but feel confident in the decisions they’ve made. Regularly logging in online shows the long-term benefits of embracing digital tools. These numbers illustrate how technology can empower people to take control of their financial future.”
