Non-retired Canadians are worried about health costs, lifestyle expenses, and not having enough assets in retirement
A recent study has estimated Canadian life expectancies to reach as high as 87 years for women and 84 years for men. Experts have reacted to the study with concerns over the possible stress this could have on the labour force, healthcare system, and pension funds. The issue of sustainability through one’s sunset years has been echoed in a recent survey on retirement.
According to Franklin Templeton Investments’ 2017 Retirement Income Strategies and Expectations (RISE) survey, 9 out of 10 Canadians who are not retired are concerned about the potential impact of high living costs in retired. The percentage was roughly the same for non-retired Americans.
For Canadians, lifestyle and health were the retirement expense items that were most concerning (20% each); among Americans, 33% were most worried about healthcare while only 11% identified lifestyle as a cause of apprehension.
“The concern about expenses appears to be well-founded, as over one-third (39%) of Canadians who are 11 or more years into retirement said their overall expenses have increased since they retired,” said Franklin Templeton Investments President and CEO Duane Green. Seventy-three per cent of those retired said they would advise pre-retirees to “save early, save often and save consistently.”
Although 49% of pre-retiree Canadians reported being concerned about outliving their retirement assets or having to make major sacrifices during retirement (with 43% of Canadian millennials reporting those same concerns), 15% of Canadian pre-retiree baby boomers and 25% of pre-retiree Gen-Xers have not set anything aside. With around three decades ahead, 50% of millennials have yet to build a retirement nest egg.
Sixty-five per cent of Canadians who are not retired are pondering the option of working during retirement, with 19% of yet-to-retire baby boomers expecting that it will be their primary source of retirement income. Alberta exceeds the national average in this measure, with 70% of pre-retiree Albertans planning to work even after retiring.
Unsurprisingly, the RISE survey found that 93% pre-retirees working with an advisor are saving for retirement, compared to only 47% among those not getting financial advice. Among pre-retirees who have an advisor and over $50,000 set aside, 48% believe they will have a better retirement than previous generations did, compared to around 33% of pre-retirees who have the same savings level but no advisor to work with.
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According to Franklin Templeton Investments’ 2017 Retirement Income Strategies and Expectations (RISE) survey, 9 out of 10 Canadians who are not retired are concerned about the potential impact of high living costs in retired. The percentage was roughly the same for non-retired Americans.
For Canadians, lifestyle and health were the retirement expense items that were most concerning (20% each); among Americans, 33% were most worried about healthcare while only 11% identified lifestyle as a cause of apprehension.
“The concern about expenses appears to be well-founded, as over one-third (39%) of Canadians who are 11 or more years into retirement said their overall expenses have increased since they retired,” said Franklin Templeton Investments President and CEO Duane Green. Seventy-three per cent of those retired said they would advise pre-retirees to “save early, save often and save consistently.”
Although 49% of pre-retiree Canadians reported being concerned about outliving their retirement assets or having to make major sacrifices during retirement (with 43% of Canadian millennials reporting those same concerns), 15% of Canadian pre-retiree baby boomers and 25% of pre-retiree Gen-Xers have not set anything aside. With around three decades ahead, 50% of millennials have yet to build a retirement nest egg.
Sixty-five per cent of Canadians who are not retired are pondering the option of working during retirement, with 19% of yet-to-retire baby boomers expecting that it will be their primary source of retirement income. Alberta exceeds the national average in this measure, with 70% of pre-retiree Albertans planning to work even after retiring.
Unsurprisingly, the RISE survey found that 93% pre-retirees working with an advisor are saving for retirement, compared to only 47% among those not getting financial advice. Among pre-retirees who have an advisor and over $50,000 set aside, 48% believe they will have a better retirement than previous generations did, compared to around 33% of pre-retirees who have the same savings level but no advisor to work with.
Related stories:
Can retirement portfolios be safeguarded in the current markets?
How can clients get the most out of their RRSPs?
