The Canadian Press - ONLINE EDITION

Is 25 too young to save? Not if you want to retire on time: experts

  • Print

TORONTO - When 20-somethings look ahead to the new year, saving for retirement is unlikely to top their list of financial worries.

But a new survey suggests that's exactly where it should be, given that 70 per cent of people polled thought they could only afford to retire if they started saving by age 25.

It may seem like a daunting task for a generation known for its high debt levels, costly tuition fees and lacklustre job prospects, but experts say that doesn't mean it's impossible.

"There's so much going on when you're a young person just fresh out of school or trying to find your own way that it's hard to prioritize everything," said Brett Strano, a financial adviser with Edward Jones in Mississauga, Ont.

"The challenges that are posed with that is that no one really knows how to allocate their extra cash flow."

Only 26 per cent of those surveyed, across various age groups, said they felt they had saved enough for retirement, a figure that dropped to 20 per cent among workers with a household income of less than $100,000.

Those surveyed also said they only put nine per cent of their savings toward retirement on average, with RRSPs as the primary vehicle.

"You have a great opportunity when you're young (to build savings) because of the compounding over a large period of time," said Bob Stammers, director of investor education at the CFA Institute.

"The problem is you don't have the money. Even if you didn't have student loan debt, which most people do and they need to get rid of, and consumer debt, people are just not making as much when they start out."

And for young people enjoying a regular paycheque for the first time, there is a strong temptation to spend.

"You want to start (saving) as soon as you can, and that's different for everybody," said Stammers.

"I don't think there's necessarily an age; I think for most people it's going to be when they start in the working world and when they get involved with an organization that has a... (pension) plan."

That's exactly what Krystal Yee, 31, did after getting her first job.

While she couldn't save much, she made a point of putting $20 into an RRSP every month.

"It wasn't a lot but it was something and it helped me maintain a saving mentality," said Yee.

"It's really motivating to see my savings grow even if it was just a little bit and then, after I got out of debt, because I was already in the habit of saving money, all the money that I had earmarked for debt repayment now went into my savings."

RRSPs are the type of investment vehicle that may allow people to save for retirement at the same time as other life goals such as owning a home, since they allow first-time homebuyers to take money out — effectively borrowing from themselves — without a tax penalty if they need the money for a down payment.

Many companies also now offer new employees a group RRSP or a defined contribution pension plan instead of defined benefit plans, which have become expensive to fund in the current low interest rate environment.

"The onus now moves to the employee to think about ... where their money should be invested," Strano said.

The survey, prepared by Vision Critical for Fleishman Hillard, was conducted online between Oct. 3 and Oct. 7, among a sample of 3,029 Canadians adults employed either full- or part-time.

The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Key of Bart - Cali For Jets Nation

View more like this

Photo Store Gallery

  • Two Canadian geese perch themselves for a perfect view looking at the surroundings from the top of a railway bridge near Lombard Ave and Waterfront Drive in downtown Winnipeg- Standup photo- May 01, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • JOE BRYKSA/WINNIPEG FREE PRESS Local-(Standup photo)- A wood duck swims through the water with fall refections in Kildonan Park Thursday afternoon.

View More Gallery Photos


Do you agree with the sale of the Canadian Wheat Board to foreign companies?

View Results

View Related Story

Ads by Google