Higher borrowing costs, inflation and stock market volatility have added more challenges to preparing for retirement, says a new study by the National Institute on Ageing (NIA).
The largest study of its kind, according to NIA, it surveyed almost 6,000 Canadians to gain insight into growing older in this country.
While overall people 50 and older are doing well, the retirement readiness measure revealed the pressure Canadians have come under since the shock of the pandemic, the spike in inflation and the most aggressive hikes to interest rates in recent memory.
Only about a third, 35 per cent, of working Canadians 50 and older say they are in the financial position to retire when they want, while almost 40 per cent said they can not afford to retire.
Even among older Canadians, over 80, only half of those still working said they could afford to retire when planned.
“The fact that half of Canadians 80+ still working and intending to retire did not believe they can afford to retire suggests that many who stay in the labour force into very old age are doing so out of necessity rather than choice,” said the study.
The ability to afford to retire also varies significantly across the country. Quebec stands out as a province where Canadians are aging well, said the study. Almost half of people here over 50 said they could afford to retire when they want, the highest of any province.
At the opposite end of the scale is Alberta, where only 22 per cent said they could afford to retire, a decline of 10 percentage points since 2022.
“Overall, as they contemplate getting older, the rising cost of living was by far the most frequently reported concern among Canadians aged 50 and above,” said Dr. Bonnie-Jeanne MacDonald, director of financial security research for the NIA.
“Next came running out of money.”
Yet even before the challenges of COVID-19 and its fallout, Canadians had been struggling to save enough for retirement, said the study.
Today only about a third of working Canadians have some form of workplace pension coverage, compared to about half in the 1970s, it said.
Families in their pre-retirement years, aged 55 to 64, are more likely to be carrying debt than in previous decades, and older Canadians must plan for their savings to go further or risk outliving them, said the study.
Yet while the need for Canadians to build their own savings is growing, putting away for the future has had to compete with paying for higher living costs today.
NIA cites findings from the Healthcare of Ontario Pension Plan which suggest that as many as 32 per cent of working Canadians, including a fifth of those aged 55 to 64, have never set aside any money for retirement.
Almost half, 44 per cent, of Canadians did not set aside any money in the past year, that survey found, and 44 per cent of the 55-64 age group reported having less than $5,000 in savings.
___
Financial Post
Canada’s economy picked up speed in the final months of 2023, beating expectations with 0.2 per cent growth in November and estimate of 0.3 per cent in December.
The GDP readings were a lot firmer than economists had been expecting and means there will less pressure on the Bank of Canada to start cutting interest rates soon, said BMO chief economist Douglas Porter.
“This solid result, after a long dry spell for growth, affords policymakers the ability to gently push back on easing chatter, as they wait for underlying inflation to come down further,” he wrote in a note Wednesday.
Sure enough, after the data came out, the Canadian dollar rose and market pricing for the first rate cut shifted from April to June.
Many of today’s technology market darlings are no doubt best-in-class companies, but investors are also getting caught up in highly speculative assets such as cryptocurrencies, meme stocks and non-fungible tokens. Portfolio manager Martin Pelletier says we shouldn’t ignore history. Find out more from FP Investing
* * *
Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at aholloway@postmedia.com with your contact info and the general gist of your problem and we’ll try to find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.
Today’s Posthaste was written by Pamela Heaven, @pamheaven, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com, or hit reply to send us a note.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
