Two recent surveys by Canadian banks highlight a growing issue of concern that seems to fly under the radar most of the time.
The issue involves basic financial literacy as well as individuals’ confidence and skills in this essential area.
Finances, aside from personal relationships, are most crucial to our daily affairs.
Yet from these surveys it seems large numbers of Canadian haven’t got a clue about basic money handling skills — skills that should be as common as tying shoelaces.
One of the surveys by the CIBC Bank looks at attitudes of adults and what they have achieved towards planning and saving for retirement. The results are shocking.
Just over three in four Canadians — 77 per cent — are worried about not having enough money in retirement. That’s over 23 million people concerned about having a decent retirement.
Some observers say non-retired folks have higher than needed expectations of retirement but accounting for that still leaves a huge number.
Thirty-five per cent of Canadians worry about outliving their retirement money.
And 11 per cent haven’t managed to put aside any savings, relying entirely on Canada Pension Plan and Old Age Security. Many of these folks are among Canadians who never had a chance to save due to job skills and economic upheaval.
The other survey by TD Bank illustrates the inability of Canadians to manage their own retirement planning.
Fifty-five per cent — over half — don’t know how to make stock trades online. Thirty-nine per cent don’t know where to find free educational sources to learn about saving and investing.
Most investors have to start with small amounts but 25 per cent don’t believe investors can start with small amounts. Only 30 per cent understand that you can start investing with less than $100.
Just to be clear, resources to learn about investing are easily accessible. Every bank, stock broker, or investment adviser has free programs to help you learn.
If you feel you can’t trust them because they have products to sell, there are independent financial planners. For the do-it-yourselfers, there are independent online resources like investorlearning.ca.
This issue has massive implications for future government social programs, future taxation, expenditures and general economic well-being. Comfortable retirees are good consumers assisting economic growth.
The central issue of financial illiteracy among Canadians requires education to resolve these concerns. Both the banks sponsoring the surveys have started programs to educate people about retirement planning and investing.
The need is more fundamental than they and other financial institutions can address.
For adults, there is need for some sort of planning mechanism like the entrepreneurial Junior Achievement clubs in schools.
For the younger generation still in school, the obvious solution is classes in money-handling and financial basics.
Programs in school and adult education can offset future demands on publicly-funded plans.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
