Nearly half of Canadians over the age of 45 are heading into their retirement without being fully financially prepared to live comfortably, a new survey has found.
Commissioned by the Canadian Institute of Actuaries (CIA), the survey showed that only 45 percent of respondents agreed that they are confident in their financial future, and just 8 percent are “very prepared.”
Twenty percent said that they will never fully retire, and 42 percent admitted they are unprepared.
And while about half those surveyed have every intention of planning for life after work, a similar number are not seeking financial advice of any kind, be it from a bank, a specialist adviser, a relative, or even a book.
“It is interesting—and alarming—that despite the best of intentions and a clear understanding of the risks of not being adequately prepared, too many pre-retired Canadians have yet to take action to protect themselves financially for the future,” said CIA President Robert Howard in a press release.
Howard noted that a full 72 percent of pre-retired Canadians are worried about maintaining a reasonable standard of living in retirement and what impact increasing health care costs will have on their savings and overall quality of life.
He is concerned that this group, with about 20 years left in the workforce, will reach retirement financially unprepared.
“With the current economy less than ideal, it is only natural to focus on today rather than tomorrow. But it is important for Canadians of all ages to seek advice about their financial future,” he said.
Howard praised Canada’s provincial finance ministers who met in Prince Edward Island Monday to discuss the economy and ways to strengthen the country’s retirement income system.
The ministers decided to pursue three options, one being exploring pension innovations that would allow financial institutions to offer broad-based defined contribution arrangements to multiple employers, all employees, and the self-employed.
They also agreed to work together on financial literacy initiatives that help people make more informed decisions when planning for their retirement and said they would consider a “modest, fully funded, phased-in approach” to increase coverage and adequacy of Canada Pension Plan benefits.
The CIA recently briefed several ministers and their officials on the institute’s White Paper on Government-Facilitated Retirement Income Plans. According to the CIA release, the country’s actuaries are ready to work with governments on the planning and implementation of potential changes to the system.
The CIA said pre-retirees need to take responsibility for their financial future and take action early in order to determine the best plan for their retirement. As well, an increase in the level of savings, especially by those who don’t usually save, is “very much needed.”
With only 53 percent of people seeking financial advice, Howard said there is obviously a need for education on retirement strategy.
“Actuaries are the key experts in the pension and retirement savings field. The more we understand how Canadians perceive retirement risk and how they manage, plan, and prepare for retirement, the better we are in helping them cope with risk.”
Commissioned by the Canadian Institute of Actuaries (CIA), the survey showed that only 45 percent of respondents agreed that they are confident in their financial future, and just 8 percent are “very prepared.”
Twenty percent said that they will never fully retire, and 42 percent admitted they are unprepared.
And while about half those surveyed have every intention of planning for life after work, a similar number are not seeking financial advice of any kind, be it from a bank, a specialist adviser, a relative, or even a book.
“It is interesting—and alarming—that despite the best of intentions and a clear understanding of the risks of not being adequately prepared, too many pre-retired Canadians have yet to take action to protect themselves financially for the future,” said CIA President Robert Howard in a press release.
Howard noted that a full 72 percent of pre-retired Canadians are worried about maintaining a reasonable standard of living in retirement and what impact increasing health care costs will have on their savings and overall quality of life.
He is concerned that this group, with about 20 years left in the workforce, will reach retirement financially unprepared.
“With the current economy less than ideal, it is only natural to focus on today rather than tomorrow. But it is important for Canadians of all ages to seek advice about their financial future,” he said.
Howard praised Canada’s provincial finance ministers who met in Prince Edward Island Monday to discuss the economy and ways to strengthen the country’s retirement income system.
The ministers decided to pursue three options, one being exploring pension innovations that would allow financial institutions to offer broad-based defined contribution arrangements to multiple employers, all employees, and the self-employed.
They also agreed to work together on financial literacy initiatives that help people make more informed decisions when planning for their retirement and said they would consider a “modest, fully funded, phased-in approach” to increase coverage and adequacy of Canada Pension Plan benefits.
The CIA recently briefed several ministers and their officials on the institute’s White Paper on Government-Facilitated Retirement Income Plans. According to the CIA release, the country’s actuaries are ready to work with governments on the planning and implementation of potential changes to the system.
The CIA said pre-retirees need to take responsibility for their financial future and take action early in order to determine the best plan for their retirement. As well, an increase in the level of savings, especially by those who don’t usually save, is “very much needed.”
With only 53 percent of people seeking financial advice, Howard said there is obviously a need for education on retirement strategy.
“Actuaries are the key experts in the pension and retirement savings field. The more we understand how Canadians perceive retirement risk and how they manage, plan, and prepare for retirement, the better we are in helping them cope with risk.”
