The majority of Canadian workers approaching retirement (80 per cent) still believe they will be able to choose the timing of their retirement — but that might not be the reality.
Four in ten Canadians (41 per cent) reported they were not able to retire on the date of their choice, according to RBC’s 2013 Retirement Myths and Realities Poll, which surveyed Canadians aged 50 plus.
Major reasons for the retirees’ unplanned departure times included an employer’s request (41 per cent) and health issues (22 per cent).
“As Canadians approach their retirement, planning ahead takes on added importance,” said Amalia Costa, head of retirement strategies and successful aging at RBC.
“Your retirement date may not be something you can control, but you can shape your retirement income plan to take the unexpected into account, so you are better prepared financially, no matter how much time you may have before you retire.”
One-fifth (20 per cent) of these retirees had as little as one month, or even no advance notice before their retirement. The majority (65 per cent) had notice of one year or less.
“Chances are two out of three retiring Canadians will have less than a year to transition into their next stage of life and they are going to have to create a new paycheque to support that next stage,” said Costa. “We advise our clients to begin refining their retirement 'roadmap' at least five years before they expect to retire, to get a clearer idea of their retirement lifestyle, as well as the corresponding retirement income plan that will help them achieve it.”
Other key findings:
- Almost three-quarters (72 per cent) of fully retired Canadians responded that, in hindsight, they had retired "at the right time".
- Among fully retired Canadians who felt they had retired at the right time, the following reasons were cited for feeling this way:
- "I wanted to enjoy active retirement while my health is good" (79 per cent)
- "I didn't need any more money/had enough money" (37 per cent)
- "I wasn't happy at work" (26 per cent)
- "I wanted to join retired spouse/partner" (20 per cent)
- "Health concerns" (14 per cent)
- "I wanted to volunteer" (13 per cent)
- "I needed to take care of someone else" (eight per cent)
- The top strategies cited by Canadian retirees for supplementing their retirement income if necessary:
- Move (downsize, rent, etc.) or stay in my home and live frugally (tied at 79 per cent)
- Stay in my home and sell assets (44 per cent)
- Borrow against my home equity (38 per cent)
- Return to paid work (29 per cent)
- Stay in my home and rent a part of my home to create income (16 per cent)
- Take out a loan without borrowing against my home equity (10 per cent)
- Ask a family member for financial help (five per cent)
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.