The national Institute on retirement and saving (IRE) from HEC Montreal today unveiled the results of a survey on financial literacy.
Conclusion : the vast majority of Quebecers (and Canadians) have only a vague idea where that will come from their retirement income.
The portrait is from a survey conducted in December with 3006 Canadians from 35 to 55 years. The survey consisted of 29 questions.
We assessed their financial culture in general, but more specifically their knowledge on the three pillars of our pension system : the tools of personal savings (RRSP/TFSA), the public pension plans (QPP/OAS) and employer-sponsored pension plans.
Far from the passing grade
The average score among Quebecers at just above 38 %. Other Canadians are not the best. The results improve among older respondents, among the more educated and among those with the highest incomes, but none of these sub-categories do not come close to passing grade of 50 %.
Very few people know the difference between the different types of employer-sponsored pension plans, a significant portion of future retirees still confuses the characteristics of the TFSA and the RRSP.
The operation of the Quebec pension Plan remains nebulous for many Québécois, while the mechanisms of the pension of the old age Security and, especially, the guaranteed income Supplement (GIS) seem to be a mystery to a vast majority of people.
The impact on the retirement
Bernard Morency, actuary and associate professor at HEC Montréal, laments of the results.
He is convinced that a better knowledge of our pension system would allow Quebec to better prepare for their retirement.
“There are people who are worried about their retirement and who should not be, but there are people who do not care about them and that should,” he said.
Our retirement system allows people with low income easily maintain their standard of living in retirement, he notes. The people most likely to experience a decrease in painful train of life, according to him, are those which earn between 50 000 $ and 80 000 $.
“If they do not have employer-sponsored pension plan and are not saving, they will feel to spend down their retirement income, they will not find it funny. “This represents a lot of the world.
The actuary recognizes that the sources of information on the retirement system abound.
“But we see that the information is not. The best way to reach people, it is to inform them in their work environment. “
Here is the information that is the minimum that should be aware of a Quebec on our pension system, according to Bernard Morency :
- The QPP replaces 25 % of income from work.
- The amount of the pension of the old age Security, 613 $/month in 2020.
- From 40 000 $ of income, it’s best to put a little money aside for retirement. Below this threshold, it’s not worth the money, the public pension schemes will take over and make up in large part.