Are you a Saver or a Spender?
June 27th, 2008 | by Editor |A first-class Certified Financial Planner can help you not only with investing and estate planning, but also explore your tendencies toward saving and spending and help you align these habits with your financial goals.
For the first time on record, Canadians reached an alarming milestone: as a country, our rate of saving has gone negative. That means we have become a nation of spenders, rather than savers. Of course, it can be argued that it’s becoming more expensive to live, but it cannot be denied that people are spending like never before. What’s frightening about this fact is that “savings” includes savings for retirement. We’ve all heard of studies where the majority of the population state that they plan to retire before they become eligible to collect either Canada Pension or Old Age Security. The irony of this is there are corresponding studies showing that only a fraction of people are actually saving money to make their retirement happen. One would assume that many people are expecting someone (our government?) to take care of them in some way.
We realize that, since you are reading this, we are probably “preaching to the choir.” You very most likely are already doing something about your retirement plans. In fact, established investors tend to be the ones drawing from Registered Retirement Savings Plans. And while it is true that if you do have significant income during retirement you may have your Old Age Security clawed back, we feel that too much income is a good problem to have.
When asked what they will do if they have shortfall in retirement, most people indicate they would take a part-time job. But let’s face it, there are only so many Wal-Mart greeters in the world. In an interesting sidebar to these statistics, 71% of the population said that a flexible balance of work/leisure time was the best way to spend retirement. Only 16% said they would be happiest if they never had to work again.
Sadly, the bottom line is that saving has lost its importance to far too many people in Canada, and with it goes our freedom. When we have the financial reserves, we have the freedom to choose where we live, the freedom to protect our health and family life, the freedom to realize our dreams and desires.
If you’re already saving on a regular basis, you belong to a growing minority, but definitely a minority you want to be in.
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