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2008 General Meeting Assemblée générale 2008 Toronto, Ontario

Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2008 General Meeting Assemblée générale 2008 Toronto, Ontario. Are Canadians Saving Enough for an Independent Retirement?. Looks at cohort expected to retire around 2030 + Present savings patterns

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2008 General Meeting Assemblée générale 2008 Toronto, Ontario

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  1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2008 General Meeting Assemblée générale 2008 Toronto, Ontario

  2. Are Canadians Saving Enough for an Independent Retirement? • Looks at cohort expected to retire around 2030 + Present savings patterns • Research done at University of Waterloo January to April 2007 (supervised by Doug Andrews and Steve Bonnar) • A chance for a CIA “media” event (June 14, 2007, Toronto)

  3. Are Canadians Saving Enough? Key findings: • Many Canadians do not understand that OAS + GIS + C/QPP is not enough • Social Security provides a 40% replacement rate for an average earner • Study reviewed 40-year-old Canadian earning $40,000 or $80,000 retiring in 25 years (base year = 2005) • Single person earning $40,000 a year would need to save as much as 20% of income every year for 25 years to retire independently • A couple with a combined $40,000 income would need to save 30% or more (of gross income) (this includes paying mortgage and workplace pensions)

  4. Key Findings • About 2/3 Canadians are not saving enough to meet necessary household expenses • Those who are doing well (1/3) have at least two of: Home with no mortgage Employer-sponsored RPP RRSPs Private Savings (One is not enough) • Working beyond 65 is a viable alternative

  5. Implications • Canadians need more education re: retirement • Allow larger incentives for saving - Higher RRSP limits - Mortgage interest deductibility • Halt the decline in DB coverage

  6. Media Response • Media Contacts: Norman Gendron President CIA Steve Bonnar Rob Brown In total • 15 media interviews were conducted • 74 radio/television stations covered the story • 67 newspaper or electronic news stories • Total reach: 2.12 million Canadians A huge success but …..

  7. Internal Response Malcolm Hamilton in a letter to the CIA Bulletin argued the savings targets were way too high. Said we had mis-led Canadians A dis-service

  8. So … We decided to “substitute facts for appearances and demonstrations for impressions” The CIA commissioned an independent study of the basic living expenses for the elderly in Canada. Work done by Dr. Bonnie Jeanne MacDonald, FCIA

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