At this time of year most people are thinking about topping up their RSP to get a bit of a tax break, but unfortunately some Canadians are making plans to cash out their RSP before retirement to pay for living expenses.
As politicians wring their hands over Canadians’ lack of retirement savings, figures obtained by Global News from years of tax filings indicate a significant jump in the number of Canadians making early withdrawals from their RRSPs – not for housing or education, but simply to make ends meet.
The biggest increase was from 2007 to 2009, when 1.86 million Canadians took out RRSP cash early. That figure dipped slightly by 2012, to 1.82 across Canada, but remains about 7 per cent above 2007 levels nationally, 12 per cent above 2007 levels in Quebec and almost 10 per cent above in comparatively wealthy Alberta.
Read the full article over at Global News.
Its the end of another beautiful week and a long weekend to boot!
And that means it’s time for our regular Friday Free-for-all post, this is our end of the week news round up and open topic discussion thread for the weekend.
Here’s a few recent links to kick off the chat!
–19.8% Avg loss at Olympic Village 2011-2014
–Retirement savings at risk?
–Oliver sees no bubble
–CMHC brings risk to taxpayers
–BC buyers seek investments
–Canadian RE among most overvalued
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
One of the great things about the Vancouver housing market is that we don’t have subprime lending. All of our loans are rock solid and even if they weren’t guaranteed by the government banks would still be eager to hand out the same mortgages.
If there’s one thing Vancouverites know, it’s that saving money is difficult.
So what are you to do as a responsible first time home buyer who is unable to save up the hefty 5% required to get a CMHC insured mortgage?
Don’t worry, at least one bank has your back: Vancity will match half your downpayment savings on a home priced under $500k.
Still that’s not exactly zero down, since the CMHC scrapped that in 2008, but if saving up 2.5% is still too difficult you may have other options.
But remember, unless you have a poor credit rating this still isn’t subprime.
Apparently it’s gotten harder to get the long term zero down mortgage the CMHC made available in the past, but not impossible.
ING has released the results of a survey they did showing that 3 out of 10 retired Canadians ended up having to return to work to pay bills.
Many retirees simply hadn’t saved enough or underestimated the cost of living.
The surveys portray a notable disconnect between Canadians’ expectations of life after the workforce and the reality of the cost.
ING Direct said that respondents wished they had found more ways to save for retirement, that they had started saving earlier and hadn’t “spent money so mindlessly.”
“The reality of retirement for many Canadians is a sobering reminder that you can’t put your financial future on the back burner,” ING Direct president and CEO Peter Aceto said in a release.
“Among the many other financial priorities we face during our prime working years, we need to make sure that retirement planning doesn’t get overlooked.”
So how are your retirement plans dear reader? Are you betting it all on a house in Vancouver? Are you just starting out and saving and investing, or are you finding it difficult to put enough aside for your golden years?
In shocking news, it would appear that many Canadian boomer savings levels are below what it would take for a comfortable retirement.
Way back in 2006, about 20% of the boomers that responded to a BMO survey said they were not confident they had enough savings to retire on.
Now? That’s changed to 46% of boomers who say they don’t have enough to retire on.
Most boomers said they would like to retire at 59, but will need to work until 63.
The plan for many is to take a part time job or sell off belongings.
About 32 per cent expected to sell their home, while another 19 per cent said they will rent out part of their home for additional income.
To Buttigieg, boomers’ ability to save may have been affected by the challenges associated with paying off a mortgage, helping children through university and caring for elderly parents.
Inflation, low returns, living a long life and health issues call also spoil retirement plans, according to Mastracci, but he says one of the biggest problems continues to be debt loads.
“A lot of retirees still have debts (and) they have to clear the deck,” he said.
A recent report from Equifax says a growing number of seniors are taking on more debt to fund retirement lifestyles.
Hat-tip to Many Franks.