I recommend you read this and heed the implicit warning.
The idea that Canadians are fiscally prudent is a farce to anyone in-the-know. Most Canadians live paycheque to paycheque, have no savings, overuse their credit cards and HELOCs and are overleveraged on their real estate assets. The collective 'we are better than the US' mentality is a joke since the average Canadian's personal balance sheet looks just like their American cousin's balance sheet from 3 years ago.
The only thing fiscally prudent about Canada is that our banking system was never 'transformed' to the US / European model back in the 90s, with no small protest from the banks. Because of the high reserve ratios that the banks are required to maintain and with no small help of taxpayer backed mortgage loan guarantees via CMHC, it is not surprising that Canadian banks are phenomenally profitable. Mind you, in a credit contraction, bank earnings will be far from stellar.
Canadians need to save between 10 per cent and 21 per cent of their pretax incomes each year – if they save consistently for 35 years – to have comfortable retirement incomes, according to a new report by former Bank of Canada
governor David Dodge.
The report says many Canadians are unaware of the high savings levels they need for their retirement years, and may believe they are saving adequately when they are not.
The report, co-authored by Alexandre Laurin and Colin Busby and published by the C.D. Howe Institute, calculates various savings scenarios based on assumptions that Canadians aim to have annual retirement incomes between 50 per cent and 70 per cent of their preretirement incomes.
“Our findings provide Canadians with a ‘reality check' about the saving rates required to meet their retirement goals,” Mr. Dodge said in a release Thursday.
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