Working Canadians say their physical health is better than their financial health, according to a recent study.
The study, conducted by financial services firm Investors Group, found that 67 per cent of 2,170 working Canadians believe their financial well-being trails their physical well-being.
This imbalance may be the reason that more than half (58 per cent) said they plan to do some kind of paid work in retirement. This is in stark contrast to the 23 per cent of current retirees who are working.
Baby boomers have the strongest intentions to remain in the workforce, with 65 percent of respondents in the 45-64 age group saying they plan to do some sort of work in retirement.
However, health isn’t something that can always be counted on. While only eight per cent of non-retired Canadians say they have a health condition that might prompt them to retire earlier than they would prefer, 21 per cent of retired Canadians said they encountered a health condition that required them to retire early.
“As we age, health and other complications can come into play. It is critical to remember that you may not be able to work as long as you hope or plan to," said Debbie Ammeter, Investors Group's vice-president of Advanced Financial Planning Support.
Working in retirement about more than money
Money isn’t the only reason that Canadians want to keep working after retirement. Thirty per cent of survey respondents said the opportunity to maintain connections with other people was a benefit of working in retirement.
"While work in retirement is certainly a great way to maintain and enhance social connections, we prefer the decision to be a choice rather than a necessity. Having a financial plan for retirement can help ease the pressure as well as help make choices that best suit each individual," added Ammeter.
Unfortunately, too many Canadians are leaving retirement planning until late in the game. While Canadians on average say they think they'll retire at age 61, forty-two per cent of retired respondents say they did not start thinking seriously about retirement until after age 50.
"But late is better than never," said Ammeter. "There are still important decisions to be made that will benefit from advice - decisions around pensions and accessing retirement income in a tax effective way, for example."
Government programs more important for retirees
When it comes to funding their retirement, Canadians are overwhelmingly counting on RRSPs and government pensions as a source of income, but those currently in retirement are counting more on government programs. Canadians are also relying on employer-sponsored pensions, but many lack knowledge about their plans. Of those with a plan, 51 per cent of non-retired and 45 per cent of retired respondents did not know if their plan was defined benefit or defined contribution.
"Now more than ever, Canadians are charged with being engineers of their own long-term financial security," said Ammeter. "Professional advice and advance preparation for retirement are key."