Just 35 per cent of Canadians aged 50 and older report they’re in a position to financially afford to retire, while a slightly larger percentage (37 per cent) say they aren’t and 25 per cent say it’s unclear, according to a new survey by the National Institute on Ageing and the Environics Institute for Survey Research.
The survey, which polled nearly 6,000 Canadians aged 50 and older, explored older Canadians’ perceived ability to financially support themselves later in life with two indicators: financial well-being and retirement readiness.
“Not only has saving for retirement become more challenging — due to increasing life expectancies, older Canadians looking to retire must also plan for their financial security over longer timelines or else risk outliving their retirement savings,” noted the report. “The [coronavirus] pandemic has only heightened these concerns: NIA research has shown that most Canadians are now concerned about the financial security of their families, with the level of worry being particularly high among Canadians close to retiring or in early retirement.
Read: Editorial: Pandemic just the latest challenge facing retirement readiness
“In light of these challenges, as the number of older Canadians nearing and transitioning into retirement continues to grow, it is important to understand whether older Canadians who have yet to retire feel financially prepared to do so.”
In terms of financial well-being, Canadians aged 80 and older reported higher levels of financial well-being than their younger counterparts: 89 per cent felt their income was adequate and 78 per cent said they could weather a potential financial shock. This was a higher proportion than for those aged between 50 and 64, where the share was 63 per cent and 56 per cent, respectively. However, the report noted this higher level of confidence may not be reflective of the actual financial circumstances of these varying age groups.
More than half (56 per cent) of Canadians aged 50 and older said they’re retired or on a disability pension, while about a third (35 per cent) said they’re still working — either full time, part time or self-employed. Not surprisingly, Canadians aged 50 to 64 were much more likely to still be working than their older counterparts. And among Canadians aged 65 to 79, 14 per cent reported they’re working and 83 per cent had retired or were on a disability pension. For those 80 years and older, the figures were three per cent and 94 per cent, respectively.
The survey also asked older Canadians who had yet to retire or weren’t on a disability pension about their retirement plans. Among them, only 25 per cent reported having no interest or intention of retiring. The remainder reported they intended to retire, but were at different stages of thinking and planning for their retirements.
Read: Canadians concerned about retirement readiness: surveys
For example, 38 per cent of this group said they wanted to retire but had yet to make any specific plans or decisions to do so. Another 18 per cent reported they had a plan for retirement, while five per cent said they’re currently in the process of retiring.
Older men reported feeling more confident in their ability to afford to retire when they wanted to than older women. Among Canadian men aged 50 and older who intended to retire, more than a third (38 per cent) reported they’re in a position to financially afford to do so when they want to, while this sentiment was only shared by 31 per cent of women.
The proportion who said they’re in a position to afford retirement when they wanted to was also higher among older Canadians who reported being partnered (39 per cent) than those who were single (27 per cent), highlighting the role of pooling income in helping to save for retirement. Similarly, the proportion who held this view was considerably higher among those who reported being in excellent or very good health (48 per cent) than fair or poor health (18 per cent), as well as those who were university educated (45 per cent) than those who have completed less than a high school level of education (30 per cent).
Read: Canadians’ retirement confidence drops as life expectancy rises
Finally, the survey found regional differences across Canada in terms of people’s intentions to retire. Quebec had the largest proportion of older adults who reportedly felt confident in their ability to retire, with 44 per cent of adults aged 50 and older who were working and intended to retire saying they’re in a position to financially afford to retire when they wanted. This was 10 percentage points above Ontario (34 per cent), which had the second largest share.