A new study reveals how financial pressures are delaying retirement plans
Rising living costs and competing financial priorities are making it increasingly difficult for many Canadians to save for retirement, according to the annual IG Wealth Management Retirement Study. Conducted in partnership with Pollara Strategic Insights, the study highlights the financial struggles and aspirations of non-retired Canadians.
The findings reveal that nearly half (46%) of non-retired Canadians prioritize spending on their current lifestyle rather than saving for the future. Common reasons include debt repayment (38%) and a preference to enjoy life now (18%).
Rising costs are a key factor affecting retirement planning. Four out of five respondents (80%) indicated that the rising cost of living hinders their ability to save for retirement, while more than half (56%) reported delaying savings due to financial pressures.
Despite these challenges, Canadians continue to envision a fulfilling retirement. Two-fifths (38%) hope to prioritize travel, while others plan to engage in part-time work or consulting (17%) or dedicate time to hobbies and personal interests (33%).
The study also revealed varying timelines for retirement. Almost half (47%) of participants expect to retire before the age of 65, while one-third anticipate working beyond 65 to cover basic living expenses, supplement income, or maintain social connections.
On average, non-retired Canadians allocate 12% of their income toward retirement savings. However, the majority of their income is consumed by basic living expenses (67%) and leisure activities (20%).
Christine Van Cauwenberghe, head of financial planning at IG Wealth Management, noted that increasing costs and debt present significant obstacles. “Rising costs and mounting debt repayment challenges often undermine Canadians’ ability to save for retirement,” she said.
Financial advice gap
The study also identified a notable gap in the use of financial advice. Only one-third of non-retired Canadians reported working with a financial advisor. Among those who do, the majority said their advisors help them balance current financial needs with retirement planning (76%) and provide personalized advice (91%).
The survey, conducted in December 2024, included a sample of 1,511 adult Canadians aged 18 and older who are not yet retired. While online surveys do not carry a margin of error, a probability sample of this size would typically have a margin of error of ±2.5 percent, 19 times out of 20.
This study sheds light on the financial challenges faced by Canadians as they balance present-day expenses with long-term retirement goals.
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