According to a report released this week by the Conference Board of Canada, the majority of Canadians feel they cannot afford to retire.
In its report, the independent research group noted, despite the fact that many Canadians said they are putting money aside for retirement, the majority are concerned it will not be enough to sustain them throughout their golden years.
Almost 60 per cent of those surveyed felt they were not in a comfortable position to retire — and 60 per cent of those respondents were on the cusp of retirement, between ages 55 and 64. A little more than 40 per cent of those 65-years-old and above reported their nest egg was lacking.
Even less likely to have put money aside were women and those with lower household incomes.
While she called the findings “disturbing,” lead research director at the Conference Board, Judith MacBride-King added there is some good news.
“A good number of younger Canadians are beginning to consider their future post paid-work,” she explained. “About 34 per cent indicated that planning for retirement is a priority for them — and 24 per cent noted that they have formulated a plan to prepare for their eventual retirement.”
Further, the study showed more than one-third of Canadians didn’t know when they would be able to retire and more than 40 per cent of employers believed their employees to be overly optimistic in their assessment of their retirement date. And while most public sector workers had a defined benefit plan in place, 45 per cent of those in the private sector did not. Group RRSPs are the most common plan (accounting for 63 per cent).
“One of the key findings of the employers study is that Canadian companies are concerned employees simply don’t know enough about their retirement prospects,” said William da Silva, retirement practice leader at Aon Hewitt, the firm which helped compile the research. “Clearly, there’s room for employers to play a bigger role in financial literacy, but many are concerned about the possibility of litigation if they do. Current Canadian law provides no protection from liability to those plan sponsors who provide plan members with appropriate with appropriate choices and advice.”
The average planned age of retirement was 63.2 years of age. But concern over inadequate savings has already led a number of Canadians to delay their retirement — according to the Conference Board, more than one in five respondents decided to retire later than they projected five years prior. Almost half said they would continue to work part-time or on a contract basis after retirement.
As for those currently in retirement, more than half rely exclusively or in large part on public pension plans.
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