A fifth (21 per cent) of Canadians who are nearing retirement with more than $100,000 in investable assets said they expect to outlast their savings by 10 years, compared to 16 per cent in 2010, according to a retirement readiness survey by the Royal Bank of Canada.
Indeed, the coronavirus pandemic has caused some Canadians to hit the pause button on their retirement date, as 18 per cent of survey respondents said they’ll now be retiring later than expected.
Respondents approaching retirement also said they’ve been resetting their retirement savings goals. Those with more than $100,000 in investable assets now estimate they’ll need to save $1 million on average — about $50,000 more than they reported they needed to save in 2019 — and over three-quarters said they expect to fall short of their goal by almost $300,000 on average.
Meanwhile, those with less than $100,000 in investable assets have lowered their retirement savings goal to $533,153 (compared to $574,354 reported in 2019); however, this group noted they have a much larger savings gap of $472,991.
To help bridge a shortfall during retirement, both of these groups said they’ll either stay in their current home and live more frugally (37 per cent for those with greater than $100,000; 36 per cent for those with less than $100,000), return to paid work (31 per cent and 36 per cent, respectively), downsize/move (31 per cent and 23 per cent, respectively) or ask a family member for assistance (three per cent and five per cent, respectively).
“If you’re nearing retirement without a formal plan, there’s a shrinking window of opportunity to review your options, to see if you can enjoy the retirement lifestyle you’re hoping for,” said Rick Lowes, vice-president of strategy at RBC, in a press release.