Canadians estimate they need $756,000 in retirement savings but most have little idea how they might achieve that.
A new poll from CIBC shows that 90% of respondents who are not yet retired or semi-retired do not have a formal financial plan for their desired retirement lifestyle.
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Women are more likely than men to be taking a big chance with their future financial security and are less likely to seek professional advice to sort it out.
"If you don't have a retirement plan, you're throwing darts at numbers in the dark, guessing at how much you'll need to live on comfortably once you've stopped working," says Jennifer Hubbard, Managing Director, CIBC Financial Planning and Advice.
Here’s where the gaps are
More than half of respondents to CIBC’s poll said that they aren’t sure if they are saving enough for retirement and 37% either haven’t thought about retirement or say they are not able to save.
While $756K is the average estimated amount needed in retirement funds, 26% said they don’t know how much they need. Millennials have far higher expectation of how much they should save ($917,000) compared to Gen Xers ($842,000) and Boomers ($518,000).
The figures show that most Canadians are well short of those targets with an average $184,000 saved. Almost 1 in 5 have saved less than $50K and 30% have no retirement savings.
Of those nearing retirement (45-64 years old) 32% have no savings, 49% have saved less than $250,000 and the average nest egg is $345,000.
The gender gap
Just 22% of women have a formal retirement plan or a ‘good idea’ how much income they will need, compared to 32% of men. And while 19% of men don’t know how much they need to save, this rises to 32% for women.
Women are also more likely to rely on friends or family for retirement advice.
"The value of having a trusted financial advisor and personalized financial roadmap is in the confidence and peace of mind it gives you knowing that you're saving enough to comfortably live the life you want both now and down the road," says Ms. Hubbard.
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