Many Canadians living paycheque to paycheque

Many Canadians are struggling to save for retirement and make ends meet, according to a survey by the Canadian Payroll Association (CPA).

Forty per cent said they expect to retire later than they previously planned. The primary reason? "I'm not saving enough money for retirement,” according to 40 per cent of the 2,070 respondents.

A major contributing factor to the low savings rate is many Canadians are living close to the line. The the majority of workers continue to live paycheque to paycheque, with 57 per cent saying they would be in financial difficulty if their pay was delayed by even one week.

The numbers were even higher for younger Canadians aged 18 to 34 (63 per cent) and single parents (74 per cent). The regions with the highest percentage of workers living paycheque to paycheque were Ontario (60 per cent) and the Atlantic provinces (64 per cent).

Three-quarters (74 per cent) of employees said they have saved less than one-quarter of their retirement savings goal.

“This is particularly troubling when you realize that 71 per cent of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54,” said Dianne Winsor, chairman of the CPA.

In addition, one-half of employees across the country reported they are saving five per cent or less of their net pay — well below the 10 per cent generally recommended by financial planning experts, said CPA.

West coast (55 per cent) and Prairie (53 per cent) workers have been marginally better at saving; whereas single parents (71 per cent) and single individuals (65 per cent) stated they have not been able to save as much.

As for retirement, almost two-thirds (63 per cent) felt they would need more than $750,000. Younger people 18 to 34 are concerned they will need to save more to retire, found the survey.