Survey reveals only 30 per cent of Canadians expect to be fully retired at age 66
TORONTO, ON (February 22, 2012) – The retirement landscape in Canada is changing with only three in 10 Canadians planning to be fully retired at age 66, according to Sun Life Financial's annual Canadian UnretirementTM Index released today. The index also found a growing trend of 48 per cent of Canadians planning to phase in their retirement by working part-time or freelance, as concerns about having enough savings grow in today's economic climate.
"Canadian retirement expectations are changing with many planning to work longer and almost half of Canadians looking to phase in their retirement," said Kevin Dougherty, President, Sun Life Financial Canada. "These results are not surprising given the current economic volatility, increasing consumer debt loads, rising healthcare costs, longer life expectancy and lack of planning. We're also finding that some Canadians believe they'll have to work longer to be able to pay for basic living expenses."
Among Canadians who expect to work past the traditional retirement age of 65, 61 per cent say they are working because they need to and only 39 per cent say it is because they want to. The Index also found that for Canadians planning to phase in their retirement:
- Forty-three per cent expect to start the process between the ages of 60 and 65 working either part-time or freelance before they stop working completely
- Twenty-one per cent plan to start between the ages of 50 and 59
- Eight per cent expect to start between the ages of 66 and 70
"Interest in phased retirement has been growing over the past few years," said Ian Markham, Canadian Retirement Innovation Leader at Towers Watson. "Baby boomers are looking at it as a way to prolong their careers, pay off some debts and make a smooth transition into retirement. Having additional income during this transition creates an additional financial safety net for Canadians – which we're seeing as increasingly important in today's economy."
The current economic state is weighing heavily on the minds of Canadians with nearly half (47 per cent) stating they are worried about debt in retirement. Consumer debt is also impacting retirement planning; 44 per cent of Canadians say that paying down debt is their number one financial priority, which ranks significantly higher than saving for retirement (20 per cent).
Canadians are also living longer. According to Statistics Canada, the average life expectancy for Canadians at age 65 is 20 years, with women living even longer than men. Statistics Canada also predicts that 17,000 Canadians could reach age 100 by the early 2030s. Canadians will need to factor longevity into their retirement savings plans and consider not having income from a job for 20 years on average, or in some cases, 30 years or more.
"Canadians are living better and working longer," said Moses Znaimer, President of CARP, Canada's 350,000-member association for A New Vision of Aging. "It's no secret that my mantra has long been, ‘The best way to keep going is to keep going.' For Zoomers, working past the traditional age of retirement can be both personally beneficial and financially necessary. We will continue to work with Sun Life Financial, CARP's exclusive recommended Financial Advisor Partner, so we can offer our members support to develop a plan so they will have the choice to retire or to keep working."
When respondents were asked when they should have started saving for retirement, the average age to start was 24. Saving earlier and having a financial plan can help.
The survey also found that Canadians who have support from an advisor or a financial plan are more confident about having enough retirement income and more likely to be satisfied with their current level of retirement savings. Fifty-four per cent of Canadians who work with a financial advisor say they are satisfied with their current level of retirement savings, compared to only 28 per cent for those who do not work with an advisor.
Listen to Kevin Dougherty, President, Sun Life Financial Canada, as he comments on Canadians realizing their savings may have to last a long time.
These are some of the findings of an Ipsos Reid poll conducted between November 29 and December 12, 2011, on behalf of Sun Life Financial.
For this survey, Ipsos Reid conducted online interviews with a sample of 3,701 working Canadians from 30 to 65 years of age from Ipsos' online panel. Ipsos employed weighting to balance demographics and ensure that the sample's composition reflected that of the adult population according to Census data and to provide results intended to approximate the sample universe.
A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of +/-1.6 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, methodology change, coverage error and measurement error.
About Sun Life Financial
Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31, 2011, the Sun Life Financial group of companies had total assets under management of $466 billion. For more information please visit www.sunlife.com.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.
All figures in Canadian dollars.