The amount of savings Canadians believe they will need for a comfortable retirement dropped significantly in 2012 compared with just one year before, according to the results of an RBC poll released this morning.
The 23rd Annual RBC RRSP Poll found that Canadians' average retirement savings goal was $564,000 in 2012. This is a decrease of 28% compared with the average goal of $778,000 in 2011.
Jason Round, head of financial planning support for RBC Financial Planning, told Business in Vancouver that the findings can be seen in a positive light.
"One of the things that's driving that drop is that we've just come through a period of economic and market uncertainty, and a lot of people were envisioning creating a greater cushion," he said. "[In 2011] they might have ramped up those expectations for what they needed to save to establish that cushion."
He explained that with more stability in the markets in 2012 when compared with 2011, people feel they don't need as much of a cushion and can dial back their savings expectations.
Round also explained that there is another reason for the drop in retirement savings goals.
"More Canadians are expecting to continue to work in some capacity in retirement," he said, explaining that 27% of Canadians say they will never retire.
"If you're going to have that ongoing source of income in retirement because you continue to work in some way, it's going to provide you with an additional stream of income and you will need to deplete less of your savings."
The survey also found that the gender gap is closing, and that women increased their retirement goals in 2012. The changes in retirement goals for each gender are:
- men: 2011 - $732,000; 2012 - $424,000 – a decrease of $308,000 or 42%; and
- women: 2011 - $452,000; 2012 - $510,000 – an increase of $58,000, or 13%.
