Survey’s and Potential Lies

I found this article on CBC very interesting.  Basically it was saying almost 60% of Canadian’s are living paycheck to paycheck, which is disturbing to some degree but what got my attention was the number that 50% of people are saving less than 5% of their net pay for retirement.

I thought that looked a bit fishy as most people I know are at least saving that much, so I dug into it a bit more and found the original survey document.  There the original question to this statistic was:

What percentage of your pay cheque do you put toward savings? Please check only one.
1. 0%
2. 1-5%
3. 6-10%
4. 11-15%
5. 16-20%
6. 20% or higher
7. I prefer not to respond
8. I don’t know / not applicable

As you can see it’s a bit different than the news article suggests.  This isn’t CBC’s fault as they copied most of the original press release, which can be found here.  So in reality the question ignores any payroll savings like a pension plan, group RRSP, or saving bond deduction that could be used towards retirement.  Also it doesn’t even discuss retirement at all!  It’s a damn lie they way they presented it.

Keep in mind the median income for Canadian families was $61,800 on an after tax basis in 2007 (see here), while for a single person it’s only $24,200.  So after paying the mortgage, bills, payroll savings, CPP and EI and the typical spending habits.  Yes, I can believe only half of people are saving more than 5% of their paycheque.  That’s a statistic that I can believe.

So in general keep in mind news releases can lie, but also take heart.  Even if you manage to save 5% of your paycheque your already ahead of half of all Canadians.

5 thoughts on “Survey’s and Potential Lies”

  1. The data is sad no matter how you look at it. Who’s going to support all these people when they can’t work anymore? We’re in for a big mess. Everyone is transferring their wealth to big companies in exchange for goods (big picture). The select few winner wont be giving it back!

  2. Thinking outloud here.

    In Canada, we have CPP and Old Age Security. Sounds like retirement savings me.

    I guess the most common Canadian “emergency fund” is welfare.

    In a sense, for homeowners who have some equity…they can “eat their house” if they need to. By, first selling, to get at their equity, then renting. It buys some time.

  3. However CPP and OAS are defunct, no? Welfare? Yeah I guess so but that can’t work for everyone it only works for the minority (someone has to pay for it). People ultimately need to become self-sufficient. We’ve become so apathetic and this will be our downfall. The government isn’t going to help out those that didn’t plan for the future.

  4. Bear in mind also that those who save 5%, which is a common (and respectable) level of savings, will be lumped together in the 1-5% group, and probably counted as a person “saving less than 5%.

  5. Chris L,

    Oh I agree the state of affairs is very sad. At the same time in a recession this is exactly the time which people are using savings, if they have it. EI payments suck, trust me I know, I was on parental leave last year.

    CM,

    Thanks for the thoughts.

    Rachel,

    True. The statement less than 5% does lump together all the 0% as well. It’s also misleading to use a % base. As incomes rise increasing that % becomes easier, so if you are at $25,000/yr that 5% is significantly harder than at $60,000/yr. Another factor is what are you payroll savings plans deductions? If you have 5% going towards your pension/group RRSP then save 5% outside of your paycheque that equals 10% overall.

    Tim

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