Defined-contribution pension investments are managed by each individual plan member and are quickly replacing Defined Benefit Plans. This is going to be a major problem for our Country as it is for other countries around the world. In a report by the Financial Post in May the writer talked about the lack of preparation for retirement that will hurt us in the long run.
Despite heightened awareness and attention of the financial markets and the impact they could have on retirement nest eggs, Canadians remain predominantly indifferent toward their pension investments.
A BMO Retirement Institute study found 48% of women and 38% of men have no financial plan or investments.
Statistics Canada’s most numbers, show an estimated one million Canadians (6% of the workforce) are currently registered in a defined-contribution pension plan. Yet, few are actively managing their assets
Idan Shlesinger, managing partner of defined-contribution Pensions and Savings Plans at insurance consultancy firm Morneau Shepell, says most defined-contribution plan members mistakenly believe they need not worry about their retirement because they have a pension. “The impact of DC pensions hasn’t entirely been felt yet; the concern is that when it happens there will be a great deal of disappointment out there,” says Mr. Shlesinger
In England less than half of pension savers, just 46%, are putting aside enough for their retirement -- a number that's five percentage points down on last year, and a fall of eight percentage points from 2009.
To cut a long story short, it turns out that one in six pension savers has stopped making monthly pension contributions since the recession started in 2008. Keeping the wolf from the door today, in short, has taken priority over keeping the wolf from the door in retirement.
According to the Office for National Statistics (ONS), over a million of people in Britain have suspended monthly pension contributions, with pension contributions falling from £20.9 billion in 2008 to £18.7 billion in 2010 -- a fall of just over 10%.
There are no reports that I could find about how many Canadians have reduced or stopped payments into their RRSP programs since the recession, perhaps there are studies done, so if you know of one, could you please post the link here for us.
There are no reports that I could find about how many Canadians have reduced or stopped payments into their RRSP programs since the recession, perhaps there are studies done, so if you know of one, could you please post the link here for us.
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ReplyDeleteThe Financial Planning activity involves assessing the business environment.
In recent years, producers such as a financial planner or financial adviser have been available to help clients develop retirement plans, where compensation is either fee-based or commissioned contingent on product sale. Such arrangement is sometimes viewed as conflicting to a consumer's interest to have advice rendered without bias or at cost that justifies value. Consumers can now elect a do it yourself (DIY) approach, given the advent of a large, ever growing body of resources. For example, retirement web-tools in the form of simple calculator, mathematical model or decision support system have appeared with greater frequency. A web-based tool that allows client to fully plan, without human intervention, might be considered a producer. A key motivation beyond the DIY trend is based on many of the same arguments of Lean manufacturing process, a constructive alteration of the relationship between producer and consumer.
We strive to create a long-term relationship with you because that is what successful wealth management is built upon. We cannot guide you toward financial independence in one meeting any more than a doctor could proclaim your lifelong health in one visit.
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