The Vanier Institute of the Family says the 2000s should be called the 'decade of debt.' (iStockphoto)
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Schedule for Week of December 22, 2024
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Wednesday, December 8, 2010
Monday, November 22, 2010
Tuesday, October 19, 2010
Friday, July 30, 2010
Retirement taking a backseat to present: BMO
Why are Canadians dragging their feet when it comes to retirement planning?
BMO says the answer can be found inside their minds. Using behavioural finance research, the bank believes it has uncovered clues as to why Canadians are procrastinating the way they are.
A report from BMO Retirement entitled Retirement Planning: Can I Get Back To You On That? and based on a survey conducted by The Strategic Counsel reveals that Canadians are more mindful of their present financial circumstances rather than their future.
The concepts of "immediate gratification" and "paralysis of choice" have severely affected retirement planning in Canada.
Delving into the psychology behind the competing priorities, the report states that although 82% of respondents understood that saving early for retirement is important, more than 81% are more concerned with their present needs than their retirement.
Canadians are also overwhelmed with too much information and too many options involving retirement planning. This has resulted in frustration and paralysis when action is required.
Thirty-six percent of non-retirees said they are overwhelmed by too much information and this has been an obstacle to them moving forward with retirement saving plans.
"While it's often hard to act against our natural instincts, it's critically important that Canadians take an active role in planning for their future and start as early as possible," says Tina Di Vito, Head, BMO Retirement Institute. "Understanding the psychological barriers to effective retirement saving is the first step to overcoming them."
The report also points to other contributing factors that are delaying many retirement plans. Those who have children under the age of 18 are unlikely to see saving for retirement as an immediate priority, as post-secondary education may take precedence. It is also difficult for those with a heavy debt burden to focus on retirement. Lower income respondents are overwhelmed by the volume of information available.
(07/29/10)
Filed by John Powell, john.powell@advisor.rogers.com
Originally published on Advisor.ca
BMO says the answer can be found inside their minds. Using behavioural finance research, the bank believes it has uncovered clues as to why Canadians are procrastinating the way they are.
A report from BMO Retirement entitled Retirement Planning: Can I Get Back To You On That? and based on a survey conducted by The Strategic Counsel reveals that Canadians are more mindful of their present financial circumstances rather than their future.
The concepts of "immediate gratification" and "paralysis of choice" have severely affected retirement planning in Canada.
Delving into the psychology behind the competing priorities, the report states that although 82% of respondents understood that saving early for retirement is important, more than 81% are more concerned with their present needs than their retirement.
Canadians are also overwhelmed with too much information and too many options involving retirement planning. This has resulted in frustration and paralysis when action is required.
Thirty-six percent of non-retirees said they are overwhelmed by too much information and this has been an obstacle to them moving forward with retirement saving plans.
"While it's often hard to act against our natural instincts, it's critically important that Canadians take an active role in planning for their future and start as early as possible," says Tina Di Vito, Head, BMO Retirement Institute. "Understanding the psychological barriers to effective retirement saving is the first step to overcoming them."
The report also points to other contributing factors that are delaying many retirement plans. Those who have children under the age of 18 are unlikely to see saving for retirement as an immediate priority, as post-secondary education may take precedence. It is also difficult for those with a heavy debt burden to focus on retirement. Lower income respondents are overwhelmed by the volume of information available.
For those who are interested in saving for their retirement, BMO suggests the following steps:
Save early
- Create a budget
- Set financial goals and monitor your progress
- Sign up for your company's pension plan
- Make full use of tax-favoured investment vehicles
- Set up an automatic savings program
- Seek out financial help
(07/29/10)
Filed by John Powell, john.powell@advisor.rogers.com
Originally published on Advisor.ca
Tuesday, July 6, 2010
Wednesday, June 9, 2010
Fewer than half of Canadians planning for retirement: poll
From the Toronto Sun:
Fewer than half of Canadians approaching retirement age have an income strategy in place, and two thirds haven’t considered the possibility that they could outlive their savings, according to a report by the BMO Retirement Institute.
Only 48% of those polled are planning to, or already have, discussed retirement incomes and how to structure their investments, it said. While the majority believe that unpredictable factors, such as inflation or medical expenses, may affect their financial stability, only 48% have planned for such contingencies, it said.
“As Canada’s boomers draw closer to their retirement years, having a strategy to manage investment income throughout retirement should be a top priority,” said Tina Di Vito, head of BMO Retirement Institute. “Financial resources available through programs such as the Canada Pension Plan and other pension schemes likely won’t be enough to support the average retirement lifespan.”
Nearly all baby boomers will be eligible for retirement within the next 20 years, and concern is mounting that their savings will not cover basic living expenses. To tackle the problem, the government is carrying out a series of consultations on how to reform the country’s pension system.
BMO urges those in the 55 to 65 age group to take a close look at their investments to ensure they will provide enough income to support their desired lifestyle.
The survey of 1,542 adults between April 12 and 15 was carried out by Leger Marketing.
Fewer than half of Canadians approaching retirement age have an income strategy in place, and two thirds haven’t considered the possibility that they could outlive their savings, according to a report by the BMO Retirement Institute.
Only 48% of those polled are planning to, or already have, discussed retirement incomes and how to structure their investments, it said. While the majority believe that unpredictable factors, such as inflation or medical expenses, may affect their financial stability, only 48% have planned for such contingencies, it said.
“As Canada’s boomers draw closer to their retirement years, having a strategy to manage investment income throughout retirement should be a top priority,” said Tina Di Vito, head of BMO Retirement Institute. “Financial resources available through programs such as the Canada Pension Plan and other pension schemes likely won’t be enough to support the average retirement lifespan.”
Nearly all baby boomers will be eligible for retirement within the next 20 years, and concern is mounting that their savings will not cover basic living expenses. To tackle the problem, the government is carrying out a series of consultations on how to reform the country’s pension system.
BMO urges those in the 55 to 65 age group to take a close look at their investments to ensure they will provide enough income to support their desired lifestyle.
The survey of 1,542 adults between April 12 and 15 was carried out by Leger Marketing.
Wednesday, April 28, 2010
Monday, April 19, 2010
Too Much Debt
http://www.theglobeandmail.com/globe-investor/personal-finance/building-blocks/common-mistake-too-much-real-estate-debt/article1405417/
Saturday, January 30, 2010
Not Good
Canadian household savings collapsed in the 1990s and debt levels rose to record highs in the 2000s, according to a preliminary report by the Vanier Institute of the Family.
"For many families in Canada, the first decade of the 21st century brought unprecedented opportunity: these years witnessed continuous labour market growth, moderate rises in average household income, and a substantial upward shift in household savings rates," said the report.
"This decade, however, also brought with it never before seen growth in household debt. The 2000s can be labelled the decade of debt. In this same vein, the 1990s can probably be labelled the decade of the collapse of savings as annual savings plummeted by two-thirds between 1990 and 2000."
The institute looked at Statstics Canada figures for spending and savings rates, as well as increases in incomes and household debt levels.
They found that household income barely budged in the 1990s, moving up by just one per cent, compared to a 10 per cent rise between 2000 and 2009.
Yet, when it came to spending, both decades saw an increase in 10 per cent.
How families paid for that extra spending was partly explained by rising debt levels and falling savings.
"In the 1990s, this increase was financed by both rising debt and a sharp decline in annual savings. In the 2000s, the 10 per cent rise in spending was financed by rising incomes and soaring debt," according to the report.
Household debt rose by 22 per cent in the 1990s and by 45 per cent in the 2000s.
During that same period, the savings rate in the 1990s fell by 64 per cent, but rebounded and grew by 14 per cent in the 2000s.
The Vanier Institute will release a more detailed look at current trends in family and household finances next month.
Read more: http://www.cbc.ca/consumer/story/2010/01/29/consumer-vanier-report.html?ref=rss#ixzz0e7C4UYdd
Wednesday, January 13, 2010
The Psy-Fi Blog: Adam Smith’s Monkey Business
A truly excellent post coming from one who has read Adam Smith and synthesized the contents appropriately.
The Psy-Fi Blog: Adam Smith’s Monkey Business
The Psy-Fi Blog: Adam Smith’s Monkey Business
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