TORONTO – While the majority of older Canadians say their finances have not been significantly impacted negatively by COVID-19 (69 per cent), the pandemic has led them to re-evaluate how they save, invest and spend their money, according to a recent RBC Insurance study.
Canadians aged 55 to 75 have been providing financial support in various ways, by helping family/friends (39%), increasing commitments to a family legacy (31%) and charitable giving (28%).
The poll also revealed that one-in-five older Canadians (21%) have had to dip into their retirement funds in order to pay for everyday expenses, rising to 30% for those with a household income less than $40k. Moreover, a third (36%) say they are not on track with their financial goals, and a similar proportion (33%) say that the pandemic has left them feeling less confident they’ll have enough money throughout their retirement to be able to afford the lifestyle they would like to lead.
“We know that the uncertainties of the pandemic have impacted Canadians in a variety of ways and we wanted to further explore how financial fluctuations may have affected those who are nearing retirement, or have recently retired,” said RBC Insurance director Selene Soo.
How Canadians are re-evaluating the way they save and invest:
– half (50%) of older Canadians have been able to save more money since the start of the pandemic, rising to 59% among those who use a financial planner. The study found 45% are accumulating savings that were earmarked for vacation or entertainment, and holding them for future entertainment spending (55%), investing (29%), and to pay down debt (18%); and
– two-in-three (64%) say they’re on track with financial goals for retirement, while one-in-three (36%) are not. Many are also looking to make changes to their financial portfolio, where two-in-three (66%) are interested in safer investment options that guarantees income.
What’s more, 20% of older Canadians who worked with a financial planner are more confident that they’ll have enough money to last throughout their retirement, whereas only 11% of those who never worked with a planner feel confident.
“As Canadians approach retirement, financial needs and goals begin to change including the way we invest our savings,” adds Soo. “Although it’s beneficial to take a proactive role and doing your own research on investment tools, speaking with a professional like a financial planner or insurance advisor can help protect the money you’ve worked so hard to save. This can help ensure you have enough income to last during retirement or leave a legacy.”