Canadians prioritizing emergency savings over retirement, other long-term goals: survey
Among Canadians with a retirement plan, 77 per cent said they’re confident they’ll have enough money to last the rest of their lives, compared to 52 per cent without one, according to a new survey by Franklin Templeton Canada.
The survey, which was conducted in February, prior to the coronavirus pandemic, also found that among retirees, 54 per cent with a retirement plan said they’ve saved enough for retirement, compared to 33 per cent of those without a plan.
“The uncertainty and financial hardship related to COVID-19 has caused many individuals to reconsider their short- and long-term financial priorities,” wrote Manmeet Bhatia, head of private wealth at Franklin Templeton Canada, in a blog post.
Read: Canadians reducing retirement savings due to coronavirus
“Individuals without adequate savings may not only need to curb everyday spending, but also delay their retirement or other long-term goals. The virus has put the spotlight on financial preparedness and the importance of having a strategy to cope with unforeseen events or things generally beyond our control.”
Indeed, when asked to choose from a list of different current financial goals or priorities, survey respondents cited “having sufficient emergency savings to cover unexpected expenses” more frequently than saving for a home or for retirement. And one in four Canadians who felt they haven’t saved enough for retirement blamed their shortfall on an unexpected expense or event.
“In order to help achieve overall financial well-being, we believe it’s important to help people feel more empowered,” wrote Bhatia. “Setting good financial habits early, like saving regularly for a goal is important, but it’s never too late to develop a financial plan. Competing priorities call for a holistic and highly personalized approach and even small changes can help reduce stress and anxiety, should an unexpected shock occur.”
Read: Could coronavirus delay DC plan members’ expected retirements?