By – The Canadian Press
The Canadian Payroll Association says things are getting tougher for working Canadians.
The CPA, in its sixth annual survey of thousands of Canadian employees, says it found more are living paycheque to paycheque, most are saving less than they should and even more are falling further behind in meeting their retirement goals.
The association said the survey found that more than half of employees — 51 per cent — would find it difficult to meet their financial obligations if their paycheque were delayed by a single week. That was up from an average of 49 per cent over the past three years.
For those aged 18 to 29, the number is even higher — 63 per cent report living paycheque to paycheque.
Meanwhile, more than a quarter of respondents — 26 per cent — said they probably could not come up with $2,000 over the next month if an emergency expense arose.
And more than half reported saving just five per cent or less of their paycheque versus the 10 per cent recommended by financial planning experts, while 79 per cent expected to delay retirement until age 60 or older, up from an average of 70 per cent over the past three years.
“The number one reason cited for retiring later in life is that employees are not able to save enough money,” the association said Wednesday, noting that employees continue to raise the bar in terms of what they think they will need to retire comfortably.
For example, only 18 per cent of respondents felt that savings under $500,000 would be sufficient in retirement, down from an average of 21 per cent over the past three years, while 68 per cent now think savings of between $500,000 and $2 million will be required, up from 60 per cent.
“Yet despite upward adjustments in perceptions of what constitutes an adequate nest egg, the vast majority of employees are nowhere near reaching their goals — 75 per cent say they have put aside less than a quarter of what they will need in retirement up, from an average of 73 per cent over the past three years,” the association said.
“And even among employees closer to retirement (50 and older), a disturbing 47 per cent are still less than a quarter of the way there, indicating a significant retirement savings gap,” added CPA president and CEO Patrick Culhane.
Debt was a major concern of many in the survey, with 39 per cent of employees saying they felt overwhelmed by their level of debt, up from an average of 32 per cent over what the association had found in the past two years.
“In fact, 12 per cent of respondents this year indicate they do not think they will ever be debt free, and one-third of respondents this year say their debt has increased from last year.”