Fewer Canadians are living paycheque to paycheque compared to last year, according to the Canadian Payroll Association (CPA).
If pay was delayed for even one week, 42 per cent of respondents indicated they would be in financial trouble. This is down from 47 per cent last year.
Beyond this improvement, the financial health of many employed Canadians remains “troubling,” the CPA says.
Forty per cent of employed Canadians are spending all — or more than — the net pay. The regions with the highest percentage of employees spending at these levels are as follows:
• Atlantic Canada — 53 per cent
• Manitoba — 47 per cent
• Saskatchewan — 42 per cent
• Ontario — 40 per cent.
Nearly half (45 per cent) of respondents are saving only five per cent or less of their net pay. Financial planning experts generally recommend a retirement savings rate of 10 per cent of net pay, according to the CPA.
Over the past year, the CPA says there has been a marked increase in what employees consider an adequate nest-egg for retirement:
• fewer now feel that savings of $500,000 to $1 million will be sufficient (30 per cent this year, 34 per cent in 2012)
• more think between $1 million and $2 million will be needed (35 per cent this year, 28 per cent last year.
Yet the vast majority of working Canadians are nowhere near reaching their retirement savings goals — 73 per cent say they have put aside less than a quarter of what they'll need in retirement.
"Many employees know they have to save more," says Charmaine Marsden, CPA Chairman. "In fact, not saving enough is the top reason cited in the survey for having to work beyond their planned retirement date."
The poll, conducted online, surveyed 2,863 employees between July 26 and Aug. 16.
The CPA affects the legislative processes and practices of payroll professionals and software providers, who are responsible for ensuring the timely payment of wages and benefits.
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