Financial Security (for your relative with a disability)
…the first in a series to promote Financial Literacy
27% of non-retired Canadians don’t commit to any type of savings, not even for retirement
4 in 10 Canadians don’t feel confident they’ll have enough money in retirement
What’s going on? It’s possible that the 27% of Canadians who are not saving are all part of the 6 in 10 Canadians who are confident that they will have enough money in retirement….but I doubt it. Some people are not saving because they don’t have any money left at the end of the month to save. They’ve spent it on rent, food and the other necessities of living.
But most people with disabilities don’t have that excuse. The Canada Disability Savings Program (Registered Disability Savings Plan) acknowledges that people with very low incomes may not be able to save money and so it will contribute up to $1,000 a year to a total of $20,000 to their RDSPs. But only 45,000 out of more than 500,000 have accepted the offer of assistance from the Federal Government.
Really. What’s going on?
Well increasingly people are realizing that Canadians may not be sufficiently financially literate. Here’s what a panel of experts studying financial literacy for the federal government found:
Canadian and international polls, surveys and studies have consistently shown that many consumers – young and old, rich and poor – have real challenges with financial literacy, from reading financial statements to managing credit cards to planning for retirement. The findings of Statistics Canada’s 2009 Canadian Financial Capability Survey confirmed this. The largest of its kind in the world, the survey gathered information about the financial habits, behaviours and attitudes of Canadians. The survey found that:
• Only 51% of Canadians had a budget
• 31% of Canadians were struggling to meet their bills and payments
• 52% of Canadians who were planning to purchase a home were not expecting to incur any costs other than the down payment
• 70% of Canadians were confident that their retirement income would provide the standard of living they hoped for, although just 40% had a good idea of how much money they needed to save in order to maintain their desired standard of living in retirement. – Canadians and their Money: Building a Brighter Financial Future
As we speak with people who call the RDSP Resource Centre, we are realizing that the reason for low uptake of the RDSP is complicated – there isn’t just one reason. One of the reasons, however, is lack of financial literacy. The RDSP seems like an ideal place to start speaking about financial literacy – after all when there is free money on the table and it’s not a scam, there is really no excuse. So, over the next months we are going to do a series broadly about the RDSP, financial security for people with disabilities and financial literacy. Here’s the outline of the topics we plan to write about.
- Qualifying for the RDSP – more than our traditional idea of disability
- Account holders and Rep Agreements – when legal capacity is a problem
- Income, Assets and BC Disability Benefits – how our provincial income assistance helps and hinders those who want to save
- What’s the best way to save for the future – comparing the options
- RDSPs versus Trusts – digging into a questions that isn’t about to go away
- Tax savings-it’s tax time!
- What’s new – staying current with budgets and other government initiatives
- Securing the financial future for a young child
- The value of home ownership – the way most Canadians save
- RDSP Myths – tops myths from recent months
- Investment basics – someone has to talk about it
- Scams – when it’s too good to be true…
- How can your extended family help?
Naturally, if you have a specific question or area of interest, we’d like to respond. Feel free to comment, ask questions or post suggestions for future articles.