Economic uncertainty over the past five years has had an impact on Canadians’ retirement plans, according to a recent Sun Life Financial survey.
The annual Canadian Unretirement Index found the number of Canadians who expect to be retired at age 66 has dropped to only 27 per cent in this year’s study – from 51% in 2008 (a decline of almost 50%).
For the first time in five years of tracking retirement trends, the index found that the number of Canadians who expect to be retired at 66 (27 %) is almost equal to Canadians who expect to be working full-time at 66 (26%).
Almost another third (32 %) expect to be working part-time at 66, adding up to almost 60% of Canadians who expect to work past the traditional retirement age, while about 15 % are not certain.
“The dream of being able to afford a full retirement at age 66 is declining among Canadians; it’s being replaced by the reality that many people expect to be working beyond the traditional retirement age,” said Kevin Dougherty, president of Sun Life Financial Canada.
“The aftermath of the financial crisis of 2008 has had a lasting impact with more Canadians expecting they will need to work longer as a result.”
The survey revealed more Canadians are expecting to work past 66 because of necessity and fear of outliving their savings. Findings include:
– 63% expect they will need to work past 66 compared with 37% wanting to work;
– with Canadians expecting to be retired for an average of 20 years, over a third (38 per cent) say there is a serious risk of outliving their retirement savings; and
– almost a third (31%) of Canadians are not at all confident that they will have enough for medical expenses.
The survey also found that Canadians have a gap in their thinking about retirement savings. They anticipate requiring an average income of $46,000 per year for their retirement, yet they are only aiming to have $385,687 in retirement savings (excluding their home and other property).
At the same time, only a quarter of Canadians (23%) stated saving for retirement was their number one priority. Paying down debt or credit cards was the number one priority for nearly half of Canadians.
The priority placed on saving for retirement varies with age.
It was a top financial priority for 37% of early Baby Boomers in the 57 to 65 year age group. The number dropped to 12 per cent of people in Generation X – 30 to 46 year old age group – who say it’s their top financial priority.
In terms of their investments, interest rates are on the minds of Canadians.
Twice as many Canadians (25%) want the interest rate go up in 2013, compared with the number who want to see it decline (13%). There are also differences in age groups. Thirty one per cent of early boomers (age 57 to 65) want to see the interest rate rise compared to 24% of Generation Xers (30 to 46) and late Boomers (47 to 56).
For more key findings and results on the 2013 Canadian Unretirement Index, visit www.sunlife.ca/unretirementindex.
Canadians can calculate their own personal Unretirement Index score, which measures their outlook on retirement, at www.sunlife.ca/unretirementindextool.
