The reality of retirement in Canada
Canadian's might never afford retirement! Let's explore some of the reasons why Canadians feel held back by their personal finances
You want to know what's stressing us out about the Canadian Wealth industry right now? The number of Canadians that probably won't be able to retire!
Earlier this year, Stats Canada posted that 1 in 4 Canadians aren't even able to cover an unexpected expense of $500 [1]. That's pretty alarming but when you also consider a CIBC poll that found 32% of Canadians between 45 and 64 have nothing saved for retirement [2], it paints a very distressing picture for the retirement outlook of Canadians. Similarly, a 2022 survey showed that 35% of Canadians aged 18 - 34 have yet to save for retirement with 37% saving $0 for it in the past year [3]. It's pretty hard to pinpoint one specific personal finance problem as the biggest facing Canadians, however some of the most commonly reported personal finance problems include:
High levels of consumer debt: Many Canadians have growing personal debt such as credit cards, lines of credit and car loans, which can make it difficult to save and invest for the future. Consumer debt saw a 7% increase YoY from 2021-2022 [4]
Difficulty saving for retirement: With the high cost of living and low savings rates, many Canadians are not saving enough for retirement and are at risk of outliving their savings
Living paycheck to paycheck: A significant portion of the Canadian population report that they live paycheck to paycheck and have little to no savings. The number of individuals living paycheck to paycheck increased by 26% between 2021-2022 [5]
Lack of financial literacy: A lack of financial education and resources can make it difficult for Canadians to make informed financial decisions and take control of their finances
Additionally, the recent impacts of inflation and rising interest rates has added further difficulties with many Canadians losing their jobs, having stagnant income growth and struggling to make ends meet. It's worth noting that these problems are interrelated and often can lead to the other one. This is why, we at Windrose, really believe financial planning needs to become more accessible and user friendly to help drastically improve the wealth situation of everyday Canadians.
Our platform aims to help provide a self-guided experience in creating personalized financial plans, providing a simple and easy to understand step by step tool to empower Canadians.
[1] https://www150.statcan.gc.ca/n1/daily-quotidien/230213/dq230213b-eng.htm?utm_source=rddt&utm_medium=smo&utm_campaign=statcan-all-content-22-23
[2] https://www.bnnbloomberg.ca/32-of-canadians-are-nearing-retirement-without-any-savings-poll-1.991680
[3] https://www.thestar.com/business/personal_finance/advice/2022/07/05/saving-for-retirement-is-becoming-out-of-reach-for-young-canadians.html
[4] https://www.cbc.ca/news/business/equifax-q3-debt-report-1.6675541
[5] https://www.bnnbloomberg.ca/more-canadians-are-living-paycheque-to-paycheque-survey-finds-1.1821110
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