But study reveals that youngest adults are outpacing older groups
More than half of Canadian adults have told a new survey that their savings are not keeping the pace needed to achieve their long-term financial goals.
The TD Bank Group research found that just 49% of respondents believe they are on track with their savings and with two thirds citing the common theme of the cost of living as the main factor disrupting their ability to put more money into savings or investments for their future financial security.
However, 45% said they lack investment knowledge and many more are either concerned that they have ineffective long-term investments, don’t have a plan, or are holding back from making any investments at all.
With the current economic climate making Canadians cautious, 35% are opting for liquidity in their choice of savings accounts rather than TFSAs, RRSPs, or FHSAs, especially as just 30% know when it is appropriate to choose an RRSP versus a TFSA.
More than a third of respondents who have never invested and 58% who only do so once a year, although 30% don’t have a personalized investment plan with 29% of that group believing they don’t save enough money to need one and 20% not knowing where to start.
For those with investments, almost half who don’t think they are set up correctly say they would benefit from working with a financial professional.
"It's no secret that Canadians are feeling the impact of the current economic climate in how they approach their investments, and that's why it's more important than ever to seek trusted advice," said Pat Giles, Vice President, Saving & Investing Journey at TD. "It's encouraging to see that Canadians would feel more confident reaching their financial goals if helped by a financial professional. Having the right financial support can make a significant difference when it comes to planning for both short and long-term financial goals."
Gen Z doing it better
The survey found that the youngest cohort of adults, Gen Z, are already showing good financial habits.
While 44% across all respondents recognize the benefit of improved financial planning in helping to achieve their financial goals, this includes just 32% of Boomers and 43% of GenXers, compared to 59% of Gen Zs and 55% Millennials, with 68% of Gen Zs also having the highest level of respondents who invest at least once a year.
"Balancing competing saving and spending priorities can be challenging," said Giles. "It's possible to enjoy the present while also investing and saving for the future. Setting financial goals doesn't require a large amount to start; it's about cultivating a habit of investing and sticking to it."
