Retirement planning more important than ever
Spending on pension plans and other retirement pensions become significant
Troy Media – by ATB Financial
Now that RRSP season is over for another year, it’s a good time to reflect on the big picture of preparing for retirement.
Contributions to an RRSP are very important, but they’re not the only way in which we plan for the future.
Expenditures on the Canada Pension Plan (CPP) and private pensions are also significant – and spending in the Prairies leads the way.
According to a Statistics Canada survey of household spending, the median Alberta family contributed $2,708 to retirement pension plans in 2009. That is above the Canadian average of $2,556. Contributions on the Prairies are the tops in the land. Saskatchewan leads all provinces with a median household expenditure of $3,180; Alberta is second, and Ontario and Manitoba tie for third at around $2,630. The contributions include those to Canada and Quebec Pension Plans, other government pension funds, and all other retirement or pension funds (excluding Registered Retirement Savings Plans).
Spending on CPP and other retirement pensions has risen steadily over the past decade, as illustrated on the graph. Expenditures did taper off over the latter half of the 2000s, especially for Canada in 2006. It is interesting that in the worst year of the recession – 2009 – contributions did not show any measurable decline.
As the average age of Canadians and Albertans continues to increase, it’s reasonable to assume that contributions towards retirement will rise. Alberta has the youngest population of any province in the country, giving us a bit more time to prepare for retirement.
But with possible changes to government income support in the future (i.e., Ottawa may raise retirement age to 67), retirement planning is more important than ever.
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