Twothirds of Canadian households saving for retirement census suggests

By David HodgesTwo-thirds of households are setting aside money for retirement, taking advantage of either a registered pension plan, an RRSP or a tax-free savings account, Statistics Canada said Wednesday as it released the latest batch of numbers from the 2016 census.Of 14 million households, 65.2 per cent made a contribution in 2015 — the most recent year for which data was available — to one or more of the three major savings vehicles, an apparent counterpoint to the prevailing narrative that too many Canadians take a cavalier approach to retirement.Different generations took different approaches: Major income earners aged 35 to 54 were prone to make use of registered pension plans and RRSPs, while those younger than 35 and those older than 54 were more likely to contribute to a TFSA.Or, in Statistics Canada’s words: “Participation in savings plans followed strong life-cycle patterns.”Savings profileIt’s the first time the census has probed the question, taking advantage of tax data to paint a more accurate picture of just how seriously Canadians take it — a picture which experts say has long been distorted by suspect data and aggressive investment marketing.“I think things in general are still in pretty good shape when it comes to preparing for retirement,” said Fred Vettese, chief actuary at Morneau Shepell in Toronto.“For the most part, when you look at middle-income Canadians they are saving. So one of the problems with the statistics is that they end up being misleading.”Vettese said he’s particularly frustrated by the oft-cited national household saving rate, which landed at 4.6 per cent in the second quarter of this year, compared with 20 per cent in 1980.“That’s the stat that people keep on harping on, and it has dropped a lot — but that household saving rate is a funny number.”For starters, household saving doesn’t include Canada Pension Plan contributions — “for most people, you figure that their CPP contributions are savings for retirement,” he said — which means federal efforts to enhance the pension plan won’t change that figure “one iota.”What’s more, Vettese said, the household saving rate deducts what retired Canadians might take out of their nest egg once it becomes a source of income.“So, with an aging population and more people drawing an income then used to be the case back in the 1990s, obviously it’s going to look like people are saving less.”Research compiled by actuary Malcolm Hamilton of the C.D. Howe Institute suggests that the rate of retirement saving for employed people has actually almost doubled in recent decades.Retirement savings plansHamilton’s data-crunching exercise — which sought to correct for household saving’s shortcomings — showed a surge between 1990 and 2012 in contributions to retirement savings plans, even as household saving dropped sharply. Over that 22-year period, contributions went from 7.7 per cent of earnings to 14.1 per cent.“Some of that is public pension saving plans, so employers and employees are both putting money in,” said Vettese. “But some of that is actually people putting money into their RRSPs. And you also have to figure that some of the money in TFSAs will be used for retirement.”The numbers released Wednesday show a clear preference among younger workers for tax-free savings accounts, which were introduced in 2009 by the former Conservative government.Of the 45 per cent of major income earners aged 15 to 24 who saved for retirement in 2015, 33.5 per cent opted for TFSAs, compared to 14.3 per cent who contributed to an RRSP. For 25 to 34 year olds, 42 per cent put money in a TFSA, versus 37.3 per cent for an RRSP.Perhaps not surprisingly, those aged 35 to 54 — a generation more familiar with the RRSP model than with tax-free savings accounts — showed a preference for the former, at more than 45 per cent. They were, however, better savers across the board, with nearly three-quarters of their ranks opting for at least one of the three savings tools.Where young and middle-aged would-be savers are concerned, a dramatic increase in housing prices relative to wage growth has been one the biggest challenges, said certified financial planner Jason Heath.The real estate factor“Double-digit real estate appreciation and one per cent wage growth don’t work long-run on a lot of levels,” said Heath, the managing director of Objective Financial Partners in Markham, about 30 kilometres north of Toronto.“This means that more cash flow is being allocated towards home down payments, and it’s taking longer to pay off mortgages. I’m seeing a lot of cases where people are going to have to rely on home equity as part of their retirement plan.”Like Vettese, Heath said he believes baby boomers are largely doing fine when it comes to financing their retirement years.“They bought homes and saved for retirement during a boom time,” he said. “It’s the latter half of the ‘Gen-X’ generation and millennials who are getting squeezed.”A bigger challenge for young and middle-aged Canadians, added Vettese, is the low interest rate environment and the impact that the aging population is having on the balance between savers and borrowers, despite efforts by government to stimulate the economy.“Interest rates are low now and they’re going to be staying low,” he said.“That’s going to be an issue for retirees, because obviously that means they’re not going to get as much of their income from investment returns in retirement as used to be the case.”— Follow @DaveHTO on Twitter read more

Duchess of Cambridge pregnant with third child Kensington Palace announces

first_imgSix weeks ago, the Duchess hinted that a third baby was on the cards.During a visit to Poland, she was presented with a cuddly toy designed for newborns. She turned to the Duke and laughed: “We will just have to have more babies.”The Duchess is one of three children, and enjoyed a happy childhood with her siblings, Pippa and James.The new baby will be a sibling for Prince George, who turned four in July, and Princess Charlotte, who celebrated her second birthday in May. The Duke and Duchess of Cambridge are expecting their third child, Kensington Palace has announced.The Duchess is less than 12 weeks pregnant, but was compelled to bring forward the announcement after being too unwell to attend a planned public appearance today. In a statement, the palace said the Duchess was suffering from severe morning sickness, as she did with her previous pregnancies. Duchess of Cambridge “As with her previous two pregnancies, the Duchess is suffering from Hyperemesis Gravidarum.”Her Royal Highness will no longer carry out her planned engagement at the Hornsey Road Children’s Centre in London today.”The Duchess is being cared for at Kensington Palace.” The Duchess of Cambridge photographed last week Catherine, Duchess of Cambridge, Princess Charlotte of Cambridge, Prince George of Cambridge and Prince William, Duke of Cambridge The Duke and Duchess of Cambridge with Prince George and Princess Charlotte during a trip to Germany in JulyCredit:Carsten Koall/EPA David Holmes CBE, chief executive of Family Action, who runs the Hornsey Road Children’s Centre the Duchess was supposed to visit today, said: “Family Action would like to give our warmest congratulations to The Duke and Duchess of Cambridge on the wonderful news that they are expecting their third child. The couple’s third child will be born fifth in line to the throne, pushing Prince Harry into sixth place.The Prince of Wales is first in line, followed by the Duke of Cambridge, Prince George and Princess Charlotte.William Hill is offering odds of 33/1 that the Duchess is pregnant with twins. Alice is the bookmakers’ favoured name if the baby is a girl, followed by Elizabeth and Victoria. For a baby, the shortest odds are on James, Arthur and Phillip. ”We are honoured that The Duchess of Cambridge chose to visit Hornsey Road Children’s Centre.“Although she is no longer able to attend today we entirely understand why this wasn’t possible.“Once again, Family Action sends our warmest wishes to the Duke and Duchess of Cambridge on their very happy news.” Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily Front Page newsletter and new audio briefings. The Duchess of Cambridge attends her most recent public engagement at Kensington Palace on August 30Credit:Samir Hussein/WireImage In July, when she was in the early stages of pregnancy, the Duchess undertook a tour of Poland and Germany, participating in a rowing race. Afterwards she was handed a stein of local beer to toast the rowers.The news was announced as the royal couple were preparing to send their eldest child, Prince George, off to school for the first time. Duchess of Cambridgecenter_img They have chosen a fee-paying independent school in a south London borough for their four-year-old son.Thomas’s Battersea will welcome the young prince and his parents on Thursday.Prince George’s first day at school will also mark a new chapter for the Cambridges as they are now mainly based in their Kensington Palace apartment rather than their Norfolk home Anmer Hall.The Duke, who quit his job as a pilot for the East Anglian Air Ambulance in July to become a full-time royal, is also due to attend the National Mental Health and Policing Conference in Oxford on Tuesday. The Duchess’s last public engagement was a tour of Kensington Palace’s White Garden last week, to mark the anniversary of the death of Diana, Princess of Wales.Wearing a floral dress and sheltering beneath an umbrella, she showed no outward sign of feeling unwell. The Duchess of Cambridge photographed last week The Duke and Duchess of Cambridge with Prince George and Princess Charlotte during a trip to Germany in July A spokesman for Theresa May, Prime Minister, said: “It is fantastic news and she passes on her congratulations to the Duke and Duchess of Cambridge.” The Duchess of Cambridge, pregnant with Princess Charlotte in 2015 The Duchess of Cambridge, pregnant with Princess Charlotte in 2015 Four will soon become five A Kensington Palace statement said: “Their Royal Highnesses the Duke and Duchess of Cambridge are very pleased to announce that the Duchess of Cambridge is expecting their third child.”The Queen and members of both families are delighted with the news. Prince Harry said he was feeling “fantastic” about becoming an uncle for the third time, adding: “Great. Very very happy.”Asked how his sister-in-law was getting on, he told reporters: “I haven’t seen her for a while but I think she’s ok.”The Prince of Wales, the new baby’s grandfather-to-be, is “delighted” with the news, Clarence House said. The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting their third child pic.twitter.com/DZCheAj1RM— Kensington Palace (@KensingtonRoyal) September 4, 2017 The Duchess is handed a stein of beer during her tour of Germany in JulyCredit:Jane Barlow/PAlast_img read more