The majority of Canada's 50 to 59 year olds don't intend to give up their current lifestyle as they enter retirement, despite falling short of their retirement savings goals, according to a poll by CIBC.
More than one-half (57 per cent) of Canadians aged 50 to 59 would “work longer to live better,” found the poll of 800 baby boomers.
When given the option to retire earlier than planned but give up their current lifestyle and live more modestly in retirement, only 25 per cent of Canadians between ages 50 and 59 would take the offer.
Regionally, 50-somethings in Manitoba and Saskatchewan were most likely (67 per cent) to say they would prefer to work longer and live better, while those in Quebec (32 per cent) were most likely to take an early retirement with a more modest lifestyle.
One-quarter (24 per cent) of Canada's 50 to 59 year olds say they plan to carry debt into retirement. Of this group, the vast majority (80 per cent) say they will carry some debt throughout retirement, suggesting they have no immediate plans to pay off their outstanding debt, said CIBC.
This builds on previously released CIBC research that shows Canadians in their 50s have fallen short of their retirement savings goals, with almost one-half (45 per cent) having saved less than $100,000 over their lifetime for retirement.
This may also suggest some Canadians approaching retirement are too comfortable with today's low interest rates on their debt, and may not have evaluated the negative impact that ongoing debt payments can have on their cash flow, said Christina Kramer, executive vice-president of retail distribution and channel strategy at CIBC.
"Retiring with debt creates a drag on your retirement income, as monthly repayments will reduce cash flow and can actually limit your financial flexibility once you retire," said Kramer. "While some Canadians may feel they can incorporate monthly debt payments into their retirement, the reality is that repaying debt before retirement remains an integral component of maximizing cash flow."
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.