Residents of Saskatchewan lead the country in retirement readiness, according to a recent CIBC economic study.
“Saskatchewan residents in the 45 to 64 age group have retirement assets about four times greater than their annual income, which is more than any other province,” said Benjamin Tal, senior economist, CIBC World Markets. “An important factor in the province’s ranking might be the potential usage of business equity to finance retirement, since Saskatchewan has the largest concentration of small businesses in Canada.”
To determine the level of retirement readiness, the study examined the current ratio of retirement assets of individuals aged 45 to 64 in each province compared to their income and the projected share of seniors in the province’s population in 2020. Other provinces that ranked well in retirement readiness were:
- Prince Edward Island, due to a retirement assets to income ratio well above the national average of 300%;
- British Columbia, since the province has a strong retirement assets to income ratio and a relatively low percentage of seniors in the population; and
- Ontario and Alberta, because increased immigration is expected to result in these provinces having the lowest percentage of seniors in the population.
In Atlantic Canada, RRSP holdings account for 68% of total financial assets, the highest percentage in the country. Ontario residents are the least reliant on RRSP investment, which represents only 56% of their total financial assets. The high proportion of taxpayers in Ontario that are part of an employer-sponsored pension plan is a factor in this ranking.
In 2002, approximately 37% of Canadian taxpayers aged 24 to 65 made a contribution to their RRSPs and the average contribution was $4,400. The study found that Nunavut has the highest level of RRSP contributions per person, with an average contribution of $6,000.