Today Canadians nearing retirement expect to work longer, and many that have just retired had that same expectation. Within that group, the majority believe they’ll also have low liquid retirement assets.
PhD candidate Saisai Zhang and professors Mary Hardy and David Saunders in the Department of Statistics and Actuarial Science conducted the 2016 Ontario Retirement Survey (ORS). The report, Retirement Consumption, Risk Perception and Planning Objectives, examined the retirement concerns and risk preferences of 1,000 randomly selected Ontario pre-retirees and retirees aged 50 to 80.
Previously, pre-retirees estimated that they would retire around the age of 60. Those expectations have increased by five years, and the survey found that the respondents underestimate the chances that they will survive to the age of 95, which means now they need more resources to ensure financial security late in life.
The majority of respondents already had concerns about their financial security with 61 percent of respondents expecting that they will have low liquid retirement assets. More alarmingly, 10 percent of respondents anticipate having less than $25,000 in total liquid and property retirement assets.
“Canadians nearing retirement, or already retired, are not optimistic about their financial futures,” said Hardy. “As our retirement population grows, governments and plan sponsors need to make sure that there are checkpoints in place to protect Canada’s economic security.”
The study also focused on income expectations, bequest motives, positions on life annuities, as well as the likelihood of seeking professional financial advice when planning for retirement.
Through their analysis, Zhang, Hardy, and Saunders discovered three key areas of interest that require further observation: more research on the preferences and objectives of Canadian retirees; the level of wealth in retirement or pre-retirement savings; as well as the difference between expectations and experience of retired Canadians. With a focus on these topics, governments and plan sponsors could help ensure the financial well-being of all Canadians.
