Almost half of respondents say they will have to keep working past 65
Not only is the dream of early retirement fading for millions of Canadians but retiring at the standard pension age of 65 is also looking less likely.
A new survey from Co-operators found that the cost of living means that almost half of respondents say that inflation and interest rates is making it hard to save for retirement, and it’s worse for those with mortgage or rent payments.
Renters are most pressured with 77% saying they either haven’t started their retirement savings or have saved less than they expected to have done at the age they are now. For those with a mortgage, 51% are in the same boat, but 76% of homeowners without a mortgage say they have saved as much as they had planned to including around one third who have exceeded their savings target.
"Canadians are facing a precarious and challenging situation as they try to prioritize their spending. As a result, many are putting their retirement at risk, especially those who pay a mortgage or rent," said Rob Wesseling, President and CEO, Co‑operators. "This is a clear signal that today's economic strain is jeopardizing the long-term financial security of most Canadians."
Exacerbating concern is that only around half of respondents have a financial plan with those who developed it with a financial advisor (60%) more confident in their financial security than the national average (38%).
For those with no plan, 27% said they don’t have enough money to invest, 22% said investing is too complicated, and 14% don’t know where to start. Previous research found that
Retirement confidence
For those still making rent or mortgage payments, just 22% and 28% respectively are confident that their RRSP and other savings will be adequate to fund their retirement. This contrasts with 57% of mortgage-free homeowners.
With the low levels of confidence, 43% of renters and 23% of mortgage holders are unsure how they will fund their retirement. Just 13% of mortgage-free homeowners said this.
It seems likely, at least to poll participants, that delaying retirement will be necessary. Almost half of renters and four in ten with a mortgage expect to be working past 65 years of age, compared to less than one quarter of homeowners without a mortgage.
"These survey results show that Canadians are facing a tough choice – paying for living expenses today or putting some money away for tomorrow. But by setting aside their long-term goals, they're risking a bleak future," said Jessica Baker, EVP of Retail Wealth, Co‑operators. "The fact of the matter is, it's not a question of either-or. Experienced financial advisors can help figure out a way to manage day-to-day expenses while maintaining a long-term plan for financial stability."
