More than half (56 per cent) of Canadian pre-retirees aged 50 or older don’t have a retirement savings plan, according to research commissioned by the Ontario Securities Commission.
The survey, which polled 1,471 Canadians aged 50 or older, found 22 per cent of respondents across Canada haven’t started to save money for retirement. Among pre-retiree respondents who have a retirement savings plan, around a third (31 per cent) feel they’re behind in their plan.
When asked whether they know how much money they’ll need to save to pay for retirement, 38 per cent said they have no idea while 49 per cent said they have a rough idea what’s needed. Just 13 per cent of pre-retiree respondents said they have an accurate estimate of the amount they’ll need.
Among pre-retiree respondents who are saving for retirement, 36 per cent are doing so through an employer-provided pension plan. The same percentage of retiree respondents said their largest source of income in retirement is the pension plan from their former employer, while 25 per cent are relying on the Canada Pension Plan/Quebec Pension Plan and old-age security benefits as their primary source of income.
This financial unpreparedness will likely impact the length of time Canadians stay in the workforce, as 50 per cent said they’d continue working in some capacity if they didn’t reach their retirement goal by the time they retire. However, 23 per cent of respondents said they’d retire as planned and make do with less.
It’s no surprise then that 40 per cent of pre-retiree respondents believe they’ll be worse off in retirement. Indeed, among survey respondents who are already retired, more (24 per cent) respondents said their standard of living in retirement was somewhat worse than before, compared to those (15 per cent) who said it was somewhat better. The majority (52 per cent) said their standard of living in retirement is neither better or worse.
The survey also found:
- Among respondents who have a retirement savings plan, 37 per cent starting planning in their 30s, 24 per cent started in their 40s and 24 per cent started in their 20s, while 13 per cent started after the age of 50.
- 57 per cent of respondents said they feel stressed when thinking about retirement savings.
- Nearly a quarter (23 per cent) of respondents feel they will have to take risks with their investments to have enough money to retire.