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Business Topic: Are You Saving Money?

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What’s The Point If You Don’t Plan Ahead?

We all know that it´s important to put money aside for your later years. But are people doing it? Writing in The Canadian Press, Linda Nguyen, reports on a recent poll from the CIBC.

“A majority of Canadian respondents to a recent poll say they plan on putting money away for retirement this year, but the likelihood of that actually happening is considered slim.

The study, released Monday by CIBC [Canadian Imperial Bank of Commerce] found that 60 per cent of those polled say they want to contribute to their RRSP, tax-free savings account or both, in 2013.

Twenty-eight per cent say they plan on setting aside money in both accounts; 19 per cent say they will just contribute to an RRSP and 13 per cent say they will only use a TFSA.

“While it’s positive that so many eligible Canadians plan to contribute towards their retirement this year, we know from previous years that only 26 per cent of eligible tax filers actually make a contribution to their RRSP,” said Jamie Golombek, a managing director of tax and estate planning at CIBC.

He said that the ability to save sometimes comes down to budgeting.

“If you don’t have the money to make a contribution to your retirement savings, the solution may come from having a hard look at your budget. Saving for retirement is really about delaying some consumption from the present to the future,” said Golombek in a statement. . .

The top reason last year among those polled who didn’t make any contributions was that they didn’t think they could afford it. . .

“Making smaller, regular contributions throughout the year is much easier than making one large lump-sum contribution to your RRSP,” he said. “If you set up your regular savings plan so that a portion of each pay cheque automatically goes to an RRSP account or your TFSA then you can’t spend it.” . . .

Those aged between 25 to 34 years old were also the most likely (71 per cent) to say they planned on making retirement contributions, while those aged 65 and over were the least likely (45 per cent).

Check your understanding

A. What do these words mean? Match the word with its definition.

1. poll
2. slim
3. release
4. set aside
5. eligible
6. estate
7. budget
8. afford
9. lump sum
10. spend

a. available
b. save
c. plan
d. a voting
e. use up
f. complete
g. small
h. belongings
i. publish
j. be able to pay

Question & Answer

Match the question and the answer.

Question Answer
1. According to statistics, what percent of Canadians actually contribute to their RRSP? a. Spend less money in the present.
2. Which age group contributes more to their retirement? b. In TSFAs and RRSPs
3. What is the best way to save for retirement? c. Only about a quarter of Canadians save for retirement this way.
4. What percent of Canadians said they wanted to save for retirement? d. Make a big one-time contribution.
5. Where can Canadians invest their retirement money? e. Those under 35 years of age.
f. Over 50% said they would.

Answers

Check your understanding

1. d
2. g
3. i
4. b
5. a
6. h
7. c
8. j
9. f
10. e

Question & Answer

1. c, 2. e, 3. a, 4. f, 5. b.

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