Canadians feel better prepared for retirement

Canadians at all stages of their careers feel they’re more financially prepared for retirement.

A Scotiabank survey finds 62% of future retirees say they’re comfortable that they’re on track to achieve their retirement goals.

Compared to the 2013 study, this figure is an increase from 55% who felt prepared to retire when their career comes to an end. The highest increase was found in the 55-plus age group (77% in 2014 vs. 63% in 2013).

Read: Most Canadians don’t have savings plans

Key findings from the 2014 study were:

  • similar to 2013, just under three-in-ten (28%) Canadians say they have a written financial plan;
  • slightly fewer Canadian future retirees are concerned about having enough money to support their retirement (69% in 2014 vs 72% in 2013); and
  • 37% of future retirees indicated that they would be forced to rely on children or other relatives for financial assistance, down from 43% in 2013.

Read: Canadians need help with their retirement portfolios

While Canadians polled cited lack of affordability as the number one reason for not investing more, this number decreased year over year—to 59% in 2014 from 64% in 2013.

Respondents to the annual Scotiabank survey who expect to retire in the future indicated the top sources of expected retirement income are:

  • personal savings held in RRSP/RRIF (59%);
  • government pension programs (58%);
  • savings outside of RRSPs/RRIFs (38%); and
  • personal employer sponsored pension plan (37%).

Read: How the TFSA limit increase changes the savings landscape

“The federal government’s announcement that they have increased the annual contribution limit of the tax-free savings account (TFSA) to $10,000 effective immediately enables Canadians to take advantage of greater savings opportunities that help them to become financially better off,” says Mike Henry, senior vice-president and head of retail payments, deposits and lending at Scotiabank.

The study’s findings show that the percentage of pre-retirees who expect to continue working after “officially” retiring from the workforce remained flat year over year at 60%. Eight percent of respondents say they have no plans to retire.

The top three reasons respondents provided for working past retirement are: staying mentally active (51% in 2014 vs 52% in 2013); financial necessity (50% in 2014 vs 49% in 2013); and a need for social interaction (35% in 2014 vs 41% in 2013).

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