Economic uncertainty and poor financial planning are being cited as key reasons why a majority of Canadians surveyed in a new poll say plans to retire by age 66 are more of a fantasy than a reality.
Sun Life Financial’s annual Unretirement Index poll, released Wednesday, found that only 27 per cent of respondents believe they’ll retire by 66, a nearly 50 per cent decline from the previous year.
And, for the first time since the insurance giant began this poll five years ago, it found that the number of Canadians who plan on retiring by 66 is nearly equal to the proportion that plan on working full-time past the age of 66 — 26 per cent.
Another 32 per cent of respondents said they anticipate doing part-time work past 66, and 15 per cent said they remain undecided.
“I think the financial crisis has had a lot of impact on people’s household balance sheets, the low-interest environment for sure has had an impact on people’s savings and projections but really the realization is that people are living longer and longer,” said Kevin Dougherty, president of Sun Life Financial Canada.
“So you put all those things together and a lot of people are increasingly saying they’re going to have to stay in the workforce that much longer.”
The survey found that 63 per cent of those polled said they need to work past 66 out of necessity, compared with 37 per cent who said it will be because they want to.
It also found that on average, Canadians said they wanted $46,000 in annual income to retire comfortably but 59 per cent said they will have less than $250,000 for retirement by 66. Thirty-eight per cent said they’ll have less than $100,000 saved.
Dougherty says the results show that Canadians aren’t doing the math properly and meeting the gap between their expectations and their financial reality.
He urges people to put in place a financial plan — regardless of age.
“What we see in the data is that people who have got a financial plan are that much more likely to be able to retire than people that don’t,” said Dougherty. “It’s never too late … but for sure, the sooner you start, the better off you will be.”
Thirty-eight per cent of those surveyed say they are worried they will outlive their retirement savings, while 31 per cent say they don’t know whether they’ll have enough money to cover medical costs in their golden years.
The poll was conducted by Ipsos Reid from online interviews with a sample of 3,017 employed Canadians between the ages of 30 to 65 years old. It was conducted between Nov. 29 to Dec. 6, 2012.
The survey is said to be accurate within plus or minus two percentage points.