Paying Down Debt once again tops the list of financial priorities for Canadians entering 2013, while Retirement Planning declines in importance
TORONTO, Jan. 2, 2013 /CNW/ - Canadians have named paying down debt as their top financial priority entering 2013 - the third year in a row that debt has topped the list of financial priorities across the nation. The annual poll conducted for CIBC by Harris/Decima also shows that retirement planning has fallen out of the top three priorities nationally, as age groups traditionally focused on retirement planning have turned their focus to debt repayment and other priorities in 2013.
Over the last three years of this CIBC poll, Canadians identified the
following as their top financial priorities:
|Paying Down Debt||17%||17%||14%|
|Managing Day to Day Spending/Budgeting||8%||14%||12%|
"These results highlight that Canadians are well aware of the importance of good debt management and remain focused on reducing debt in the year ahead," commented Christina Kramer, Executive Vice President of Retail Distribution and Channel Strategy for CIBC. "Having been named the top priority three years in a row, there is an opportunity for more Canadians to turn awareness of debt management into action and outline some clear steps towards paying down their debt in 2013."
One of those steps could involve seeking advice about how to accelerate debt repayment. About half (46 per cent) of Canadians surveyed said they had met with an advisor in the last year, however only 6 per cent of those surveyed thought about debt management as a topic of conversation with an advisor.
"Many Canadians are missing an opportunity to get advice about debt management as part of their broader financial plan," noted Ms. Kramer. "As you repay debt, you reduce interest costs which can free up some of your income to be directed towards other goals, such as building up your savings account or having a better monthly cash flow."
Some are Delaying Retirement Planning to Focus on Debt
A key finding of the poll is that age groups where retirement planning was traditionally a top priority have now shifted to a focus on debt reduction.
- Two years ago, 24 per cent of respondents aged 45-64 named retirement planning as their top financial priority, which fell to just 12 per cent in this year's survey.
- At the same time, debt management increased as a priority from 14 per cent two years ago to 18 per cent today for this age group.
"While it is important to address immediate financial needs such as debt reduction, it is equally important to keep long term goals such as retirement in sight," commented Ms. Kramer. "Even small contributions today can make it easier in future years to reach your retirement savings goals."
While it can be challenging to keep multiple financial goals top of mind, Ms. Kramer added that getting advice can help to keep the two in balance.
"It is possible to make debt repayment a priority while still keeping up regular investments into your retirement plan, and that can be made easier by having a clear plan with an advisor that outlines the steps you can take each month to get closer to your goals over time," added Ms. Kramer.
Advice on Delivering on Financial Priorities
- Recognize that your finances are all connected - Making progress on one aspect of your financial goals can lead to an opportunity to improve in others, meaning you don't have to focus on just one priority at a time. For example, a reduction in debt can free up funds to go towards savings, or to further accelerate debt reduction. Renewing your mortgage at a lower interest rate can generate an improvement in cash flow that can be used to start making RSP contributions earlier in life which can grow over time.
- Talk to an Advisor - Most Canadians don't think about making debt reduction the topic of a conversation with an advisor, but it can help you make progress on paying down debt by looking at your overall financial picture and putting realistic steps in place to reduce interest costs and accelerate debt repayment.
- Stick to your Plan - Once you have a plan in place, stick to it. If you fall off track, get back to your plan as soon as possible and keep making progress towards your goal.
KEY POLL FINDINGS
Percentage of Canadians, by age, who named either paying down debt or
retirement planning as their number one financial priority entering
Top Financial Priority entering 2013, by region:
Day to Day
Percentage of Canadians who have met with an advisor in the last year,
Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 2,009 Canadians between October 25th and November 4, 2012. A sample of this size has a margin of error of +/-2.2%, 19 times out of 20.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.