Many Canadians are worried about retirement and are in the dark about how they’ll live out their golden years. While that’s the conclusion to be drawn from a number of recent surveys that were released ahead of the RRSP season, it’s not all bad news.
Here’s a look at what researchers have found.
Financial security a top concern
Half of Canadians under 50 are worried about their current and future financial states, according to a survey by global professional services company Towers Watson. The report suggests there are multiple sources contributing to Canadians’ financial anxiety:
• Less than one-third of Canadians surveyed believe that Old Age Security and the Canada/Quebec Pension Plans will provide the same level of benefits in the future as they do today. More than 70% believe we will see diminished coverage under provincial health care benefits.
• Close to two-thirds of respondents 40+ rank saving for retirement as their number-one financial priority. But three-quarters of Canadians are saving below their ideal target and only half believe they can improve their financial prospects. For many Canadians, this means delayed retirement, according to the report.
• 76% of Canadian workers have endured cuts in salary increases and benefits, or have lived through significant organizational change. “While corporate profitability has improved and rising stock prices have boosted retirement accounts, slow economic growth and stagnant wages continue to weigh on public confidence and contribute to a continued fear about a retirement crisis in Canada,” said Karen Burnett, a senior Towers Watson retirement consultant, in a release.
Optimistic, but in the dark
Canadians are optimistic about their retirement lifestyle, but few know what their cost of living will be and what their pensions will offer, according to new research from Investors Group.
• 69% of Canadians nearing retirement age don’t know what the maximum monthly payout from government is for CPP, QPP or Old Age Security. Yet more than one third anticipate this will be their primary source of retirement income.
• 37% of Canadians say their employer pension will be their primary source of income, but 55% don’t know the monthly benefit they can expect.
• Seven in 20 Canadians say they will have enough to pay the cost of living in retirement, yet when asked what they anticipate their monthly cost of living to be, 39% of Canadians 55-64 did not know.
There is an emerging sense of optimism among Canadians with regards to their retirement plans, according to the Sun Life Canadian Unretirement Index. On average, Canadians say they expect to retire at 66 – the lowest figure Sun Life has seen in four years. In addition:
•38% of survey respondents report they’re feeling more satisfied with their retirement savings, compared to 34% last year.
•80% are confident about their ability to take care of basic expenses during their golden years, compared to 78% the previous year.
•71% are optimistic about their ability to take care of medical expenses in retirement—up from 69% the year prior.