According to a report from the C.D Howe Institute, Canadians appear to be “reasonably well-prepared for retirement.”
Canadians looking to retire are typically advised to save enough so that they have approximately 70 per cent of their income which they had during their working years. The author of the report, Malcolm Hamilton, dismisses this commonly espoused advice and that Canadians would be able to retire with only 50 or 55 per cent of their regular salaries.
“I think we’re better off than we thought because too many Canadians think they have to get to 70 per cent and probably most of them will be just fine with 50 or 55,” according to Hamilton.
And while Canadians are certainly starting to live longer lives, the author’s counter-point was that increased life-spans might actually translate to a year or two for the average person.
Some of the author’s assumptions however; seem to be predicated on the idea that upon retirement age, Canadians won’t have a mortgage. At MonsterMortgage.ca, we’ve encouraged clients to adopt a plan and have a strategy to get to zero on their mortgage. Every dollar that you save on an interest payment is a dollar that could go towards your retirement plan. No need for the cat-food.
If you’re interested in reading more about the author’s commentary on the matter of Canadian’s savings and retirement, you can read the complete report here: http://www.cdhowe.org/pdf/commentary_428.pdf
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