The majority (90 per cent) of Canadians aged 50-plus who have not yet retired expect to have a successful retirement, yet more than one-third (36 per cent) are worried they do not have enough money to live well and do what they want, according to the RBC Retirement Myths and Realities Poll.
In addition, Canadians aged 50-plus who are not yet retired are expecting to live into their mid- to late 80s, with 46 per cent of the 2,245 survey respondents basing this longevity projection on family history and 17 per cent on current health. They also anticipate that, by their mid- to late 70s, their present lifestyles will change due to health or disability constraints — leaving approximately a 10-year gap when they may become more dependent on others.
"As life expectancy rates continue to rise, it becomes very important to plan for longevity, which includes taking into account the impact of changing health circumstances," said Lee Anne Davies, head of retirement strategies at RBC. "We know that success in retirement will look different for each individual, no matter what their age. When circumstances change, you need to manage your finances well — leading up to and throughout your retirement."
To financially support their retirement years, pre-retirees list their top income sources as follows:
•registered retirement savings plans (RRSP) or registered retirement income funds (RRIFs) (90 per cent)
•government pension plan (84 per cent)
•old age security (66 per cent)
• employer pension plan (58 per cent)
•home equity (56 per cent).
Furthermore, keeping pace with inflation is top of mind with pre-retirees, but they may not have the best inflation strategy in place, found the survey. Only 35 per cent of respondents said they have invested with inflation in mind; of that percentage, males are more likely to do so (37 per cent). More than two-thirds (70 per cent) of pre-retirees surveyed said they would adjust their lifestyle as necessary to cope with inflation; of that percentage, females stated they would be even more willing to make lifestyle adjustments (77 per cent).
"Everyone hopes to have enough flexibility and funds to live the way they want to in retirement and not to have to depend on anyone else for financial or other assistance," said Davies. "The reality is that there are a number of factors in our retirement that we can't control, such as inflation and, to some extent, longevity.”
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