Many Canadians it seems are pretty happy and content with their financial situation today and their prospects for the future.
A recent poll by Mackenzie Investments has found that many people in the country find themselves better off financially now than they were 10 years ago.
In 2007, 37 per cent felt they would not be able to afford their lifestyle a decade later. But now — a decade later – 65 per cent indicated their lifestyles have remained stable or changed for the better over the last 10 years.
Ten years ago the economy was heading into a recession but looking to the future today, 63 per cent of Canadians optimistically predict they will have the same or a better lifestyle 10 years from now.
Canadians attribute this sense of confidence to the fact that nearly half (47 per cent) have had salary increases of nearly 50 per cent, most notably in Ontario, Quebec and British Columbia, and that 35 per cent more Canadians are seeking financial advice than 10 years ago.
“The results of this poll are a real vote of confidence from Canadians about where they feel they are financially,” says Carol Bezaire, vice president of tax, estate and philanthropy with Mackenzie Investments. “More Canadians now are recognizing the value of professional advice, seeking it and looking at their entire financial picture.”
Being early into the year, Bezaire has a few recommendations Canadians could consider and follow to help them maintain that positive well-being about their finances.
She suggests people talk to a financial adviser, review their retirement savings plans and strategies and examine their spending habits
“I would recommend that people look over their retirement savings and become aware of the Tax Free Savings Account versus the Registered Retirement Savings Plan (RRSP) question,” Bezaire says. “Perhaps with the exception of millennials, the public doesn’t yet have a big uptick on the TFSA. Millennials are using the TFSA more than other groups, but as a whole only 58 per cent of Canadians are maxing out their TFSAs.”
Bezaire recommends people sit down and see how much money they will need in their retirement. Once they reach that goal they still need to keep track of their finances and continue to save.
One good vehicle is corporate class mutual funds.
Corporate class funds are appealing for their tax advantages, especially by seniors and higher net worth investors, in non-registered accounts.
Spending is another area to review.
It’s a well-known fact that the amount of money Canadians owe in relation to their income is growing and recently hit a record high of 171.1 per cent. This means the average Canadian household had $1.71 in credit market debt, including consumer credit and mortgage and non-mortgage loans, for every dollar of disposable income.
In the poll 89 per cent of Canadians said technology advancements over the past decade have made it easier than ever to spend though online shopping, fast pay technology and access to instant discounts and e-commerce incentives.
Bezaire notes that people tend to spend more early in their retirement as they do a lot of travelling they didn’t have time for when they were working, but that tends to slow down as the retirement years go by.
As interest rates start to rise and with a lot of uncertainty about the North American Free Trade Agreement re-negotiations, this is a good time to look at your debt situation.
“People seem to be comfortable with debt,” says Bezaire. “It’s a societal thing, but I think the key point to come out of this research is that more people are seeking financial advice, which is a good thing.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.