Saving for retirement can be a daunting financial challenge, but it doesn’t have to be. Many Canadians share this concern, especially with the rising cost of living.
As people live longer, they feel they need more money than ever before. Fortunately, there is hope with the Canada Pension Plan (CPP).
A recent survey by CPP Investments found that Canadians have increased their retirement savings goal from $700,000 to $900,000 over the past year — a significant 29 per cent jump. While nearly two-thirds of Canadians aged 18 to 24 feel anxious about financial decisions, this number drops to just one-third for those aged 65 and older. Seniors are clearly less stressed about their finances compared to younger Canadians, and there’s a reason for that.
Importance of CPP at age 65
Why is 65 such a pivotal age? That’s when many Canadians begin receiving their benefits. Through your CPP contributions, you’re investing in your financial future. Canadian workers have a solid foundation for retirement with the fund, and seniors know this well because many of them are already receiving their benefits.
Understanding the value of the CPP can boost your confidence in having enough money for retirement. Nearly three-quarters of Canadians who are very familiar with it feel confident in their retirement savings, according to the survey. This shows how important it is to understand the benefits and to know that they are indexed to inflation and payable for as long as you live.
CPP Fund's financial strength
Managed by CPP Investments, the fund has more than $675 billion in assets, making it one of the largest pension funds in the world. It is projected to be sustainable for at least the next 75 years, providing financial support for generations of Canadians.
Building a solid understanding of your personal finances and seeking resources to improve financial literacy can help you manage money more effectively. Saving for retirement can be challenging, but having a solid plan can ease financial anxiety. Fortunately, more than 22 million Canadians have a head start on their retirement planning.
