Canadians nearing retirement are confident they have enough money to live the retirement lifestyle they desire, but many do not know how much retirement income they will need nor how much their company and government pensions will provide, according to a survey.
The Investors Group survey finds that 69% of Canadians approaching retirement age were unaware of what the maximum monthly payout from government is for the Canada/Quebec Pension Plan and old age security, yet more than eight in 10 of this age group say they plan to use this as a source of retirement income, and more than one-third anticipate this will be their primary source.
Sixty percent of Canadians say they plan to use an employer pension as a source of income, and 37% say this will be their primary source.
However, of those who say they have a workplace pension and plan to rely on it as their primary source of income, 55% didn’t know the monthly benefit they can expect.
“Planning for retirement at an early age will help Canadians to really understand what will be required to maintain their desired lifestyle and where savings and investments are needed to fill the pension gaps,” said Dave Ablett, director, tax and estate planning, with Investors Group.
Seven in 10 say that they will have enough to pay the cost of living in retirement, yet when asked what they anticipate their monthly cost of living to be, 42% of unretired Canadians did not know. The research revealed that, as Canadians approach the age of retirement, a significant number are still not aware of what it will take to support their lifestyle, with 39% of Canadians ages 55 to 64 still unclear on what to expect.
Nearly three-quarters (72%) of unretired Canadians are confident they will be able to maintain their current lifestyle in retirement. This number jumps to 91% among Canadians working with a financial advisor.
While 39% of Canadians say that confidence in their own money management has gone up over the last 10 years, 58% say their confidence in younger generations’ ability to save adequately for retirement has gone down.
In addition, 66% of Canadians are less confident in governments’ ability to continue to provide an acceptable level of pension and retirement benefits.
“While the survey indicates that Canadians are approaching retirement with confidence,” say Ablett, “it also identifies the need for Canadians to gain a better understanding of what their ideal financial future looks like so they can build a plan to get there.”
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