Currently, the mindset of Canadians is focused on paying down debt rather than retirement. CIBC recently released a study that confirmed this fact. The poll, conducted by the firm Harris/Decima, noted that 17 percent of those surveyed named debt reduction as their primary monetary goal in 2013. That is the third year in a row that debt reduction has topped the list. Debt reduction got a similar 17 percent response in 2012 and a 14 percent response in 2011.
But how successful have Canadians been in tackling that goal? According to Statistics Canada, they didn’t do as well as they’d hoped. Their stats showed that in 2012, the debt to income ratio increase to 164.6, a record number.
Among the 2,000 Canadians, 18 and over that responded, the survey found that retirement planning slipped from the top three on the priorities list. Only seven percent considered retirement a priority. In 2012 the percentage was 11 percent and in 2011, 13 percent.
The number two spot went to building savings. Ten percent of respondents considered this a priority, unchanged from the numbers in 2012. Third was getting the daily and monthly budgeting in order, with eight percent of respondents considering this important. In 2012, that category came in with 14 percent.
The poll discovered that in the age groups where saving for retirement was traditionally very important, the focus has shifted to debt reduction. In those between 45 and 64, only 12 percent listed retirement savings as their most important goal. In 2011, retirement savings came in at 24 percent. Debt reduction increased from 14 percent in 2011 to the current 18 percent.
Some financial analysts are concerned about the trend, noting that paying down debt is important, but so is planning for the future. Christina Kramer from CIBC is one of them. She noted that regular contributions, even small ones, can do a lot in reaching retirement goals. But Kramer is pleased that a number of Canadians are focused on paying down debt and realize that managing that debt is important.
Ideally, Canadians can focus on that debt and still make contributions to their retirement savings. It may seem challenging at times, but keep in mind that putting one section of your financial house in order often leads to opportunities to work on others.