New data shows that an investor might pay more in fees over the course of a lifetime than it costs to raise a child to the age of 18
Canada ranks 10th in the world when it comes to retirement security, according to a new study.
The 2016 Global Retirement Index - a study conducted annually by Natixis Global Asset Management - compares the retirement security of 43 countries. Norway, Switzerland and Iceland took the top three slots. The United States came in at 14, while Brazil, Greece and India were at the bottom of the list. Canada’s 10th-place finish is a bump up from last year, when the country came in 12th.
“When you look at what is driving these results for Canada, we can point to some things that are clearly working and some things on the horizon that would be good to address now,” Ed Farrington, Natixis executive vice president for retirement, told Business Canada. “What we’re hoping is that this ranking will provide policy makers, employers and individuals with information to us with information to use moving forward with planning for retirement savings programs.”
Farrington pointed out the country’s healthcare system and “impressively low level” of income inequality as major drivers behind its top-10 finish, Business Canada reported.
“To have a high per-capita income and low income inequality is worth noting because it means that a broad section of the population has the ability to put money toward their retirement,” he said.
However, while Canada ranked high for retirement security, Natixis also found that many Canadians are underestimating how much they should be saving, Business Canada reported. Many believed they’d only need to replace 60% of their income after retirement, as opposed to the 75%-85% generally recommended by financial planners. And Canadians reported setting aside an average of 10.5% of their annual income for retirement, while the international average is 12.2%, Business Canada reported.
Farrington told Business Canada that many Canadians don’t realize how long they’ll need savings to last.
“If you’re a couple and you both retire at the age of 65, there is close to a 9-in-10 chance that one of you will be alive in your 90s,” he said. “I don’t think people fully grasp that.”
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The 2016 Global Retirement Index - a study conducted annually by Natixis Global Asset Management - compares the retirement security of 43 countries. Norway, Switzerland and Iceland took the top three slots. The United States came in at 14, while Brazil, Greece and India were at the bottom of the list. Canada’s 10th-place finish is a bump up from last year, when the country came in 12th.
“When you look at what is driving these results for Canada, we can point to some things that are clearly working and some things on the horizon that would be good to address now,” Ed Farrington, Natixis executive vice president for retirement, told Business Canada. “What we’re hoping is that this ranking will provide policy makers, employers and individuals with information to us with information to use moving forward with planning for retirement savings programs.”
Farrington pointed out the country’s healthcare system and “impressively low level” of income inequality as major drivers behind its top-10 finish, Business Canada reported.
“To have a high per-capita income and low income inequality is worth noting because it means that a broad section of the population has the ability to put money toward their retirement,” he said.
However, while Canada ranked high for retirement security, Natixis also found that many Canadians are underestimating how much they should be saving, Business Canada reported. Many believed they’d only need to replace 60% of their income after retirement, as opposed to the 75%-85% generally recommended by financial planners. And Canadians reported setting aside an average of 10.5% of their annual income for retirement, while the international average is 12.2%, Business Canada reported.
Farrington told Business Canada that many Canadians don’t realize how long they’ll need savings to last.
“If you’re a couple and you both retire at the age of 65, there is close to a 9-in-10 chance that one of you will be alive in your 90s,” he said. “I don’t think people fully grasp that.”
Related stories:
New report gives thumbs up to CPP expansion
Most Canadians would change jobs for better retirement benefits
