Bill Morneau called it the “perfect cure” for insomniacs. Fred Vettese noted that people who bought the book on Amazon.ca also bought Dark Night Rises.
But the authors’ droll introductions at the launch of their new book, The Real Retirement: Why You Could Be Better Off Than You Think, and How to Make That Happen, Wednesday evening in Toronto did not upstage the importance of the topic.
Morneau and Vettese concluded, through their research, that Canada is really not facing a retirement crisis. And that’s simply because the real retirement income target is actually lower than most Canadians think.
While the 70% income replacement target rate has been batted about for what seems like forever, the authors say that the number is really closer to 50%. “The real target can’t be 70% for real Canadians,” said Vettese. “Most households operate on half of their gross income, so why do they need 70%?”
Also, with proper planning and a realistic outlook, Canadians should not have to worry about retirement. “People have more savings than they think,” Morneau said.
The poverty rate among seniors, for example, is less than half of what it is for working-age Canadians. Seniors have assets outside of the traditional retirement vehicles (e.g., Old Age Security and Guaranteed Income Supplement)—think real estate, cash, stocks and bonds—that can be converted into retirement income, said Morneau.
And even though low investment returns will likely continue, Canadians’ longer lifespans can help.
“People are healthier,” Morneau said, “so they can work longer.”
After years of hearing that Canadians may outlive their retirement savings, The Real Retirement turns that theory on its head. Longevity, it seems, can be a good thing.
And at least retirees will be able to afford Dark Night Rises.