- Canadians can check if their retirement is on track at www.tdretire.com
TD Canada Trust
TORONTO, Jan. 12, 2012 /CNW/ - According to research from TD Canada Trust, only 16% of Canadians, and 23% of those in the Boomer generation, have a clear picture of their retirement and what they want to do. One reason that so few have a vision for their retirement is that only 38% of Canadians (and 43% of Boomers) have a financial plan.
To encourage Canadians to start thinking about their financial future, TD has developed a retirement tracker - three simple questions to help Canadians determine if their retirement plan is on track at www.tdretire.com.
The retirement tracker encourages Canadians to answer three simple questions about their personal finances to get an idea of where they are in their retirement planning. It weighs factors like the number of years until retirement, value of current savings and the amount of regular contributions and quickly determines whether Canadians are "Getting Started", "On Their Way" or "On Track."
"You need a plan to know how much money you need to save to make sure that it lasts throughout your retirement," says Andrea Phillips, Vice President, Retail Savings and Investing, TD Canada Trust. "When you're working hard to cover your day-to-day expenses, it's understandable that your retirement seems a lifetime away and planning for it is not your top priority. But, don't procrastinate; the more time you give yourself to save, the better off you'll be."
Who's Getting Started?
Surprisingly, Canadians who are furthest from retirement are the most likely group to contribute the maximum amount to their RSPs every year (21% of Canadians in their 30s versus 12% and 14% of Canadians in their 40s and 50s respectively).
"If you start saving for retirement early and set up an automatic savings plan, you can regularly contribute a small amount to your RSP," says Phillips. At this stage, you have time on your side and you can take advantage of the power of compound interest. If you are starting later in life, you'll need to contribute more. Talk to your bank about how much you can realistically contribute and what impact that will have now and during retirement."
Who's On Their Way?
To live the same lifestyle in retirement as you do during your working years, Phillips says Canadians should aim to save enough to have 60%-80% of their annual working income per year to live on in retirement. At this stage, it is good to take a look at where you stand today and to check that your investments are working for you.
"Many Canadians contribute regularly to their RSP but aren't necessarily taking full advantage of the maximum contribution limits available to them," says Phillips. "If you are in your prime working years, take the time to determine how much you will need in retirement and then consider increasing the amount that you are investing. For example, if you hold mutual funds, even a modest increase to your pre-authorized purchase plan contribution can make a big difference in growing the value of your RSP faster."
Here's how:
| Increase in weekly contribution | Annualized Rate of Return* | Accumulated Additional RSP Savings at Retirement | ||
| From age 25 | From age 30 | From age 40 | ||
| $5 | 5.7% | $38,460.37 | $28,012.27 | $14,091.54 |
| $10 | 5.7% | $76,920.73 | $56,024.54 | $28,183.07 |
| $15 | 5.7% | $115,381.10 | $84,036.81 | $42,274.61 |
The rate of return shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of mutual funds or returns on investment in the mutual funds. For illustrative purposes only. Based on retirement age of 65.
Who's on track?
Phillips reminds Canadians that saving is only one part of retirement planning - Canadians "on track" should also meet regularly with a financial advisor to ensure their financial plan continues to evolve as their needs and lifestyles change.
"It's not unusual to have had an event that creates a detour in your plan, but a good advisor will be there to help you make sound choices when you need them to ensure your retirement savings remain on track," says Phillips.
About TD Canada Trust:
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
About the TD Retirement Savings Poll
TD Bank Group commissioned Environics Research Group to conduct a custom, online survey of 1,006 Canadians aged 25-64 who are not retired. Results were collected between November 22 and December 2, 2011.
Liz Christiansen / Caitie Croza
Paradigm Public Relations
416-413-5188 / 416-413-5206
[email protected] / [email protected]
Barbara Timmins TD Bank Group
416-307-6489
[email protected]
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