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Canadians saving for retirement, but unsure about how much is enough

Canadians saving for retirement, but unsure about how much is enough

Cash counters are an ideal resource for business owners whose customer base is largely retirees, among the prime users of Canadian currency, including polymer notes. For those who have yet to exit the workforce but plan to, the question isn't whether they have cash (they do) but how much will they need? According to a recent poll, a solid majority of them can't be sure.

9 in 10 don't have specific plan

Approximately $756,000 is the average amount respondents in a new Canadian Imperial Bank of Commerce survey suspect they'll need saved to afford the cost of retirement. Yet 90 per cent of these same participants admit that they don't have a plan in place to reach that level of savings. Of these, the majority (53 per cent) weren't sure if the amount of money they set aside was sufficient.

Jennifer Hubbard, CIBC managing director of financial planning and advice, said any kind of saving is good, but there needs to be a plan to go along with it.

"If you don't have a retirement plan, you're throwing darts at numbers in the dark, guessing at how much you'll need to live on comfortably once you've stopped working," Hubbard explained. "It's important to take an honest look at your finances today, and determine 'what' your retirement goals and dreams are because that will influence 'when' you retire and 'how much' it will cost. That way, you can find the best path to get from here to there."

65 per cent of Canadian households saving for retirement

This isn't to suggest that Canadians don't have money to work with heading into retirement. To the contrary, they've set aside, on average, $184,000 per person, the CIBC poll revealed. In the most recent Census report, almost two-thirds of households - 65 per cent - made a contribution to their registered retirement savings plan (RRSP) or tax-free savings account in 2015. Only 38 per cent. And in a separate survey conducted by RBC Royal Bank, 46 per cent of respondents cite saving additional cash for retirement as a major financial priority.

Richa Hingorani, RBC senior director of digital strategy recommends utilizing a registered retirement savings plan (RRSP) or a tax-free savings account. Ideally, both should be used.

Fifty per cent of 55- to 75-year-olds use cash on a regular basis for various purchases, based on findings from a 2015 Bank of Canada report. With so many retirees preferring to spend physical currency, including polymer notes, it only makes sense for business owners to have money counters that can process all that cash in a fast and accurate manner.

February 19, 2018