Most Canadians say they can’t afford to retire
Employers are also concerned about employees' ability to retire
OTTAWA — How are your retirement plans? Although many Canadians say they are putting money aside when their work days are over, most are concerned they haven’t saved enough to sustain them through retirement, according to a Conference Board of Canada report.
A Survey of Non-retirees and Retirees in Canada: Retirement Perspectives and Plans, finds 60% of respondents feel they have not saved enough to comfortably retire; and almost 60% of those on the cusp of retirement (55-64 years of age), plus more than 40% of those aged 65+ report that they have not put enough money aside.
Women and those with lower levels of household income were even less likely to have put money aside.
About 34% of younger Canadians indicated that planning for retirement is a priority for them – and 24% noted they have formulated a plan to prepare for their eventual retirement.
Here are some highlights:
• More than one-third of respondents say they don’t know when they’ll be able to retire.
• More than 40% of employers believe their employees are overly optimistic in their assessment of when they will be able to retire.
• 60% of current retirees say their incomes are sufficient to meet their needs, but many project difficulties over time.
• The average planned age of retirement was 63.2 years of age.
• More than one in five respondents have decided to retire later than their initial plan five years ago.
• 45.6% plan to continue to work part-time or on a contract basis after their official retirement, and the percentage increases with age.
• About 51% of those aged 45-64, and 60% of those aged 65+ say they will continue working past their official retirement date.
The research includes a companion report, An Employer’s Perspective: Retirement Savings and Preparedness, which examines employers’ views on the retirement preparedness of their employees, and retirement savings plans and practices among Canadian organizations.
It finds that more than 40% of employers believe their employees are too optimistic in their assessment of when they will be able to retire.
Close to 50% feel their employees are unaware of how much savings are needed for retirement, and a little over 30% feel there is a lack of understanding of what their public pensions income (CPP/QPP, OAS) will be.
While most public sector respondents have a defined benefit plan in place, 45% of responding private sector organizations do not. Group RRSPs are the most common plan, and are in place in 63% of the responding organizations.
Seventy per cent with defined benefit plans expressed concern about the sustainability of their plans.