Canada NewsWire
TORONTO, Jan. 24, 2017
Advice for all life stages as health care, the unexpected and running out of money are cited as key retirement concerns
TORONTO, Jan. 24, 2017 /CNW/ - A new CIBC (TSX:CM) (NYSE:CM) poll finds that nearly half (46 per cent) of Canadians do not have a financial plan in place to reach their goals, despite many feeling concerned about their retirement years.
"While most of us have a fairly good sense of our financial goals, so many Canadians do not have a clear road map in place to achieve what they want today – and tomorrow," says Sarah Widmeyer, Managing Director and Head of Wealth Strategies, CIBC. "Whether the goal is to eliminate debt, save more, or retire early, you can achieve success with a financial plan."
Key poll findings include:
'Life gets in the way'
According to previous CIBC polls, 'paying down debt' has been the top financial priority for Canadians for seven straight years, indicating few people are making headway on their goals.
"We all aim to have a sufficient nest egg for retirement and money to handle the unexpected, but everyday life has a tendency of getting in the way," says Ms. Widmeyer. "By setting out a clear path to your goals, a financial plan can help you stay on track. It also gives you the confidence to manage surprises, so that setbacks don't put your retirement dreams and other goals at risk."
The poll finds that having a financial plan in place makes Canadians feel more confident in their ability to manage unexpected changes in their finances. Additionally, those who have a financial advisor (61 per cent) also feel better able to manage setbacks. The poll surveyed Canadians with household incomes above $100,000.
A financial plan and a budget are not the same: But both are important
The poll findings show that even among those who do have a financial plan, more than a third (36 per cent) appear to be confused about how it differs from a budget, pointing to a limited understanding of the full value and purpose of a financial plan.
"While budgeting and financial planning go hand-in-hand, a budget alone is insufficient in crafting the life you want in the future," says Ms. Widmeyer. She adds that confusing a budget with a financial plan may leave Canadians ill-prepared.
Ms. Widmeyer describes a financial plan as a clear, written report detailing an individual's personal goals, financial needs and priorities in areas such as income and expenses, taxes, mortgage planning, education needs, retirement, estate planning, and insurance. A financial plan also incorporates assumptions like inflation, the time to a goal and expected rates of return, which many may miss on their own, she adds.
"There are many things to consider depending on your life stage, income and lifestyle expectations," says Ms. Widmeyer. "Is it better to pay down debt or save? Are you saving enough? Could you possibly retire earlier than you thought? These are some of the questions a financial plan can help you answer and where the real value of a plan lies."
Tips to get started
For those who are unsure of where to start, Ms. Widmeyer offers these tips:
"Now is the perfect time to speak to a financial advisor who can help you identify and prioritize your goals and set a plan to achieve them," adds Widmeyer. "The keys to success are to have a plan in place, review your progress annually, and then make any changes as needed. This will keep you on track to achieve what's important to you."
A plan for ages
KEY POLL FINDINGS:
Percentage of Canadians surveyed with a financial plan detailing out financial decisions and activities for their household:
Yes, | 54% |
No | 46% |
Top reasons Canadians surveyed without a financial plan feel they do not need one:
I have a pretty good idea of what I need to do and don't need to write it down | 42% |
My situation is pretty simple and I don't see the need for one | 26% |
Canadians' surveyed top three most important goals for having a financial plan:
Saving for retirement | 53% |
Eliminating credit card or line of credit debt | 38% |
Paying off their mortgage sooner | 38% |
Top retirement concerns among Canadians surveyed:
Increased health care costs | 51% |
Managing unexpected costs (e.g. health-related expenses, long-term care) | 45% |
Not having enough money to live the life I want | 43% |
Confidence of those with or without a financial plan in their ability to manage an unexpected life event or scenario:
| Have a | Do not | Have a | Do not |
Someone in the household losing their job suddenly | 70% | 58% | 69% | 57% |
A family illness or disability that left me or a family member unable to work for a few months | 77% | 72% | 78% | 68% |
Medical expenses not covered by my insurance provider | 77% | 71% | 78% | 67% |
A sudden, unexpected financial emergency (e.g. urgent home renovation, car repairs) | 88% | 80% | 87% | 80% |
Divorce | 51% | 48% | 52% | 46% |
Growing family | 57% | 59% | 60% | 55% |
Financial Plan Poll Disclaimer:
From January 5 to 9, 2017, an online survey was conducted among 1,007 Canadian adults with a household income greater than $100,000 who are Angus Reid Forum panelists. For comparison purposes, a probability sample of this size has a margin of error of +/- 3%, 19 times out of 20.
About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Capital Markets - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/ca/media-centre/ or by following on Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.
SOURCE CIBC - Consumer Research and Advice
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