According to the third annual survey of employees conducted by the Canadian Payroll Association (CPA), the primary reason (cited by 40%) was “I’m not saving enough money for retirement.”
Nearly three-quarters of employees (74%) said they have saved less than one-quarter of their retirement savings goal. “This is particularly troubling when you realize that 71% of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54,” said Dianne Winsor, chairman of the CPA.
The survey also found half (50%) of employees across the country reported they are saving 5% or less of their net pay. This is well below the 10% of net pay that financial planning experts generally recommend as a retirement savings rate.
While 60% said they are trying to be better savers, more than half of the individuals reported that they have been unable to do so. The remaining 40% of Canadians said they were not even trying to save more.
Most Canadians do understand what they could be doing to improve their financial situation and meet their retirement goals. Ranked in order of importance, respondents thought they should be spending less (32%), paying off credit card debt (22%), reducing their mortgage (19%), and contributing more to their retirement savings (14%).
Between July 6 and August 2, 2011, 2,070 employees responded to the online survey.