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  • Writer's pictureBarbara Balfour

Why the ‘culture of now’ is making it difficult for Canadians to save for retirement.

Written by:

Barbara Balfour

THE GLOBE AND MAIL

March 16, 2022


📰 Read the FULL ARTICLE here.


Read an excerpt below.

An increasing interest in the world of cryptocurrency and other blockchain assets such as non-fungible tokens is often fuelled by the illusion that day trading or investing in highly speculative assets is “easy” and a “sure thing,” says Cindy Marques, CFP, co-founder and chief executive officer of Money MakeCents Inc., a financial coaching company for Canadian millennials.
“There is a creeping belief that any savings deficits today can be easily made up for tomorrow by essentially gambling on a high-risk asset rather than making steady contributions into a well-balanced portfolio,” Ms. Marques says. “I typically see this type of thinking from young adults who have aggressively scrimped and saved for years for a down payment on a home.”
By the time they start house hunting, the aggressive competition in the real estate market forces them into making a bid much larger than they anticipated, resulting in a total liquidation of every single dollar available, she adds.
“They’re financially exhausted afterward. They feel like they’ve already spent the past decade saving, and now they deserve a break,” she says. “A concept like retirement feels so far away and intangible that there’s no point in worrying about it now.”
Ms. Marques counsels her clients to delay saving for a home rather than delay saving for retirement – even though this is usually approached in the opposite order.
She makes her case by showing prospective homeowners financial projections of how their lives might look if they chose to rent and earmark their potential down-payment toward retirement instead in what she calls a “financial freedom fund.”
“I tell them to think of the cash flow freedom they could have if they didn’t need to worry about making any further retirement contributions,” she says. “From that point, their savings efforts can be put toward a down payment, which is more easily accomplished now that they are older, further along in their careers, and earning a more comfortable salary.”
Ms. Marques says this approach has had great success as clients end up feeling a lot more confident and optimistic about their financial future.
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