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Retirement Planning > Saving for Retirement

Canadians to boost annual savings

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Canadians, like many other people across the globe are striving to save more in 2013 than in recent years.

As the world crawls out from the trenches of the Great Recession, people are coming into contact – many for the first time in three or four years – with some dispensable income. Some are using it to pay down debt, purchase new homes and make repairs that were put off, but others are putting that toward retirement, which just might be the only positive effect of economic downturn.

Bank of Montreal (BMO) reported today that Canadians are planning to save $9,859 in 2013, a 7 percent increase from last year. In the report, conducted by Pollara, Canadians overwhelmingly reported that saving for retirement was the No. 1 destination for their money.

Canadian savers plan on using myriad tools in order to have a comfortable retirement and notably, annuities are not in the mix. It appears the annuity puzzle does not recognize borders.

Sixty-three percent of Canadians are using a Registered Retirement Savings Plan (RRSP) to help them reach their goals while 49 percent are using a Tax Free Savings Account. Twenty-nine percent are using a high interest savings account and about 25 percent are using Guaranteed Investment Certificates.

The report notes that only 48 percent of respondents said that they were saving enough to meet their goals. And the personal savings rate in Canada, calculated by Statistics Canada, currently hovers near historic lows at 3.9 percent.