Canadians without company pension plan face uphill battle to stay out of poverty, study finds

Many aging Canadians don’t have nearly enough in the bank for retirement, new research in the Broadbent Institute suggests.

Canadians without an employee pension represent 47 per cent of those aged 55-64 in the united states. Only 15-20 percent within this group are middle-class with enough savings to comfortably retire in Ten years. The study says anyone outside this bracket will have a difficult time building up their assets to avoid poverty, despite a decade in order to save.

We have a retirement income crisis on our hands that requires urgent government action now

The study, penned by Richard Shillington, focuses on the levels of income provided by Senior years Security and Guaranteed Income Supplement relative to personal savings. The finding is the fact that these benefits aren’t adequate to help keep the retired from falling into poverty.

“The panoply of public policies offering ‘voluntary’ choices for saving – for example RRSPs, TFSAs, group RPPs, and also the newest Pool Registration Pension Plans – have demonstrated their inadequacy to address the shortcomings in declining workplace pensions along with a Canada Pension Plan with limited benefits,” the study concludes.

The senior poverty gap stands at $2.5 billion annually. The study warns of levels getting worse when the issue of retirement savings isn’t addressed.

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“This new data on retirement savings and gaps in support makes one thing perfectly clear – there exists a retirement income crisis on our hands that requires urgent government action now,” said Rick Smith, Executive Director of the Broadbent Institute.

The value of retirement assets for all those without employee pension are shockingly low. Canadians making $20,000-$50,000 have an average of $250 saved for his or her golden years. 1 / 2 of the demographic has not even half a year’s income saved. The typical single senior falls $5,600 below the poverty line, with a median income of under $20,000.

The study says Ottawa’s proposed 10 per cent GIS increase could have the minor impact of alleviating senior poverty by 12 per cent. This would still leave some 634,000 retirees impoverished.

“Our new study shows now isn’t time for Ottawa and also the provinces to punt on expanding CPP,” said Smith. “In fact, we want federal leadership to make this happen. Boosting the GIS by 10 % for single seniors is a start although not nearly enough.”