That is the question CIBC asked in a poll of 1,523 randomly selected Canadian adults who were Angus Reid Forum panelists. The results were statistically weighted by education, age, gender and region Census data to ensure a sample representative of the entire adult population of Canada.
But basically, no. The vast majority of Canadians are not saving enough.
On February 8, CIBC released the results of a poll that found the vast majority of Canadians do not have a retirement plan. 19 per cent of those polled have less than $50,000 saved. 30 per cent of those polled had no savings at all. Zip. Nada. Zero.
Those nearing retirement do not seem to be doing that much better. 32 per cent of those nearing retirement had nothing saved. Of those that have something saved for retirement, 49 per cent have saved less than $250,000. The average is $345,000.
Canadians seem to think that $750,000 or so is the target amount that would need to be achieved prior to retirement.
Only 2% have saved that amount. And only 3% have saved more than $750,000.
Although every situation is unique, a household with $750,000 would typically expect to withdraw $30,000 in the first year with subsequent annual withdrawals adjusted for inflation. Maybe. That is part of what makes the retirement puzzle challenging. Lots of factors to take into account when drawing down retirement savings.
With typical CPP and OAS of about $30,000, a household with $750,000 in retirement savings would be living off roughly $60,000 of retirement income per year. Median household income in Canada was $70,336 in 2015.
However, if the average retirement savings is closer to $450,000 at retirement, that same household would only be able to safely withdraw $18,000 per year and, with CPP and OAS for the household, retirement income would be about $48,000.
When Sun Life did a retirement survey earlier this year, it found that seniors were doing fine on roughly 62 per cent of pre-retirement household income. Given $70,000 of household income, a retirement income target of $43,400 is within reach of a typical Canadian household if, and only if, there are retirement savings. And no debt.
90 per cent without any kind of detailed retirement plan? 32 per cent between 45 and 64 with no retirement savings at all?
Given the latest numbers on Canadian household debt, there will be a reckoning ahead.