According to a recent BMO Canada survey, Canadians will need an average of $1.7 million to retire in 2023, up from $1.4 million in 2020.
More importantly, Kelly Remple, financial adviser at Remple and Dusyk Financial, said people need to make sure they have a financial cushion to support themselves and their lifestyles, rather than having to strive to have a specific lump sum that may not reflect lifestyles in different parts differently. from the country.
“I think it’s always important to be aware of these national trends, but I would also say that people who live in Vancouver and Toronto often have different ones. [financial] challenges than Saskatchewan’s,” said Remple.
Remple said trends that calculate what people need to retire are difficult to follow because it’s hard to lump people who live thousands of miles apart into the same category.
He also said not everyone will have the same spending habits or debt to pay off.
“I believe it’s more important for your average family to have a clear understanding of your own personal circumstances,” Remple said.
“What’s the right course of action for you is more important than understanding what the average trends are, involving many people living thousands of miles apart.”
The BMO survey found that the average amount held in Registered Retirement Savings Plans (RRSPs) in the Prairies was $138,391. The national average was $144,613.
The survey also revealed that inflation hit a four-decade high of 8.1% in the summer of 2022 and fell to 6.3% in December 2022.
“BMO’s Retirement Study found that 74% of Canadians are concerned about how current economic conditions, particularly inflation and rising prices, will affect their financial health, and 59% believe this affect their confidence in achieving their goals and retirement goals,” a BMO press release said.
According to the survey, 44% of Canadians are confident they will have enough money to retire as planned, but 74% are concerned about the impact of inflation and rising prices on their finances.
“Spend within your means,” Remple said. “If you know the price of everything is going up, you might have a little less disposable income to spend on material things, but at least you’ll sleep better at night knowing you’re not borrowing more in a low-cost environment. higher interest rate.”
Remple has been a financial adviser since 2008 and said 2022 and 2023 were rivals that year due to unpredictability and the difficulty of estimating and forecasting for clients.
“Since 2008, now is the toughest time,” Remple said.
Remple said a big reason was rapidly rising interest rates, which meant clients’ portfolios didn’t have fixed income to back them up when stocks and bonds fell.
“Usually everyone is happy when stocks go up, but that didn’t happen this time around. People didn’t have the fixed income portion of their portfolio to support them in any way. this time.
The BMO poll was conducted between November 4 and November 7, 2022 by Pollara Strategic Insights via an online survey of 1,500 people. The survey error rate is plus or minus 2.5%, 19 out of 20.
With files from The Canadian Press.
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