By Leila Lemghalef

Close to a third of Canadians struggle to make ends meet and are not saving for retirement, according to the latest Canadian Financial Capability Survey Managing Money and Planning for the Future.

Too few Canadians are creating a budget, and Canadians are not doing enough to secure their retirement, the report states in its key findings, which were released last week.

“Of particular concern is that a relatively small proportion of Canadians know how much they need to save for retirement – a factor that reduces their capacity to plan effectively for retirement,” it concludes.

“Education efforts must encourage Canadians to inform themselves and put in place a plan to fulfill their financial goals. A plan includes setting up a budget, which is a highly effective way for Canadians to manage their debt and save for the future.”

Aboriginal peoples living off reserve, low-income earners, and newcomers to Canada are the most at risk financially during retirement.

Overall, completing post-secondary education corresponds with better financial management and well-being.

Yet even half of Canadians with the highest level of education say they do not know how much they need to save for retirement.

The report also tells us that “even in the highest income quintile, an alarmingly high proportion of Canadians are unaware of how much they need to save.”

Among non-retirees, 60 per cent of the Canadian population says it does not know the necessary amount to save for retirement.

Less than half of 55- to 64-year-olds say they know how much to save.

“The findings point to the need for education efforts on this front to target the entire Canadian population.”

Another indication to back that up is a recently published Ipsos poll informing us that nearly 80 per cent of 55- to 75-year-olds say Canadian public pension plans will fail to provide them with adequate retirement income.

A majority of Canadians interviewed by Ipsos said they are uneasy about their retirement savings and worry about outliving their savings.

While an annuity can provide guaranteed income for life, 60 per cent admit they are in the dark about what an annuity is, confirming Canadians have a gap in knowledge.

Increasing financial literacy levels of Canadians is one of the aims of the Canadian Financial Capability Survey.

Managing Money and Planning for the Future points out that the underlying knowledge, skills, and behaviours that make up strong financial literacy include, knowing how to track expenses and budget effectively, establishing a personal budget to reach financial goals, checking bank account balances regularly, long-term financial planning.

The survey was sponsored by the Financial Consumer Agency of Canada, and carried out by Statistics Canada.

[Photo Credit: Dvortygirl/Flickr]