POLOZ: ADJUST RETIREMENT PLANS, INTEREST RATES TO STAY LOW
Sep 20, 2016
By Bob Komsic
The governor of the Bank of Canada is indicating the status quo will be here for a while.
In a business speech in Quebec City, Stephen Poloz gave no indication that the central bank’s key interest rate will be changing any time soon.
It’s been at 0.5% since the summer of 2015.
Poloz said Canadians and the country must adapt to low interest rates.
”I realize this may be cold comfort to those people who have to adjust retirement plans to a lower-for-longer world, but the difficult reality is that savers must adjust their plans.”
The central banker says with people living longer, the low interest rate environment means someone starting to save now would have to set aside much more to generate the same retirement income as the person who began saving 25 years ago, if both wanted to retire at the same age.
”There are no easy answers, particularly for some who have already retired.”
At least one economist agrees with Poloz’s remarks, and the TD Bank’s Brian DePratto believes the Bank of canada is unlikely to increase interest rates until early 2019.