A new CIBC poll suggests that a majority of Canada’s retirees feel they are currently living the retirement they hoped for today. However, some are concerned they will run out of money at some point during their retirement years.
Of those surveyed, 69% said they are currently living the retirement they wanted. But 28% feared their finances wouldn’t last the duration of their retirement. This sentiment was strongest in B.C., where 45% of retirees said they worried about running out of money; Atlantic Canadians were least likely to feel this way, at 21%.
“There are some unique factors facing today’s retirees as they look to the years ahead, including low interest rates on savings and the need to make their retirement funds last longer than previous generations, which makes long-range planning even more important,” said Christina Kramer, executive vice-president, retail distribution and channel strategy, with CIBC.
Just over half (62%) of retirees polled said they have a plan to help them determine how long their savings will last and how much they can withdraw each year to support their lifestyle. Of those with a plan, 31% said they developed it on their own, and 31% used the help of a financial advisor.
Financial planning important
“Having a plan you can be confident in can contribute to your peace of mind and allow you to enjoy your retirement with a clear view of how you will make your finances work over the long term,” noted Kramer.
It can also help determine how your retirement savings might withstand short-term financial shocks, said Kramer. This is something a significant number of retired Canadians worry about, the poll suggests, with 54% indicating that, given their current income and cash flow, they wouldn’t be able to manage an extra $500 monthly payment, if the need arose due to a financial emergency. Within this group, 34% said it would be very unmanageable, and 19% said it would be somewhat unmanageable.
“You may have to re-evaluate how much you are able to withdraw each year to ensure you do have savings that could be used in the event of an emergency to avoid taking on a new monthly debt payment that can impact your lifestyle,” said Kramer.