Many turning 'blind eye' to realities of financing: Survey
Most Canadians would like to retire earlier than they expect to be able to, but only one-third expect to retire before 65 and almost one in five expect to be working after age 70. Despite their lifestyle goals, pre-retirement individuals do not have the financial resources in place to sustain those goals, partially explaining why they anticipate continuing to work for income, according to Bensimon Byrne's latest Consumerology Report.
"While most Canadians view retirement as a 'second life' — an opportunity to do the things they really want — we found three quarters of Canadians are financially unprepared to afford the lifestyle they imagine," said Jack Bensimon, president of advertising agency Bensimon Byrne. "The 'new retirement' will look a lot more like a 'working retirement,' as retirees try to afford the quality of life they want to maintain."
More than 50 per cent of Canadians expect to work in some capacity well into their so-called golden years, found the survey of 1,500 people, though more than three quarters of current retirees haven't worked in any capacity. And while future retirees expect family to be a big part of their retirement, they are also looking forward to going back to university, learning a new language, picking up a new skill, starting a business and getting involved in the community."
"Boomers are going to revolutionize retirement," said Bensimon. "Their cognitive age is younger than previous generations at the same age. So we expect to see a combination of part-time work, part-time travel, reverse mortgages, exploring brand new interests and caring for family as the most likely combination of activities in their retirement years."
However, almost three quarters of Canadians have not calculated what income their current retirement investments will provide during retirement.
"Working people are turning a blind eye to the realities of financing their ideal retirement," he said. "They acknowledge they are not confident they have enough savings to pay for their retirement, but don't consider that fact when planning their future."
The majority of people preparing for retirement admit to worrying they will outlive their savings and less than one-half have any employer-sponsored pension plan. As a result, almost all Canadians expect government pensions, Old Age Security and Canada Pension Plan/Quebec Pension Plan to be very important elements of their retirement income. Most homeowners will also be relying heavily on the equity in their home.
