While Canadians who hold debt are actively contributing to their retirement savings, the more debt products they hold, the less they are able to put away for the future each month, according to a new CIBC poll.
The poll, conducted by Harris/Decima, finds that among Canadians holding debt, 53% say they have made a contribution towards their retirement in the last 12 months, a figure which aligns with the national average of 49% of Canadians who say they’ve made some form of retirement contribution over the past year.
But the amount of retirement savings being put away by Canadians balancing debt declines with each product they carry a balance on. Those with one debt product are making a median monthly contribution of $500 toward their retirement. That figure declines to $240 per month for those with two debt products, and to $200 for those balancing three or more debts.
“These poll results clearly illustrate the connection between good debt management and your ability to save for your long term financial goals,” says Christina Kramer, executive vice-president, retail distribution and channel strategy, with CIBC. “Planning for a successful retirement involves more than just having a regular savings plan. It also requires a strategy to pay down debt, reduce interest costs, and redirect those funds towards long-term savings.”
Kramer says past CIBC research has shown the likelihood of holding debt peaks at age 45, and then declines. She comments that as Canadians pay down their debt they have an opportunity to direct more of those funds towards retirement.