Not only do Canadians nearing retirement or already retired expect to work longer, but a majority of them believe they’ll have low liquid retirement assets.
PhD candidate Saisai Zhang and professors Mary Hardy and David Saunders conducted the 2016 Ontario Retirement Survey (ORS). The report examines 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. Now on average pre-retirees expect to retire at 65. Despite the fact that these subjects will have five more years to work, they’re also likely to live longer. The survey found that the respondents are underestimating the chances that they will survive to the age of 95, which could hamper their financial security late in life.
The majority of respondents already have 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.”
Respondents were also asked about income expectations, bequest motives, positions on life annuities, as well as the likelihood of seeking professional financial advice when planning for retirement.
After analyzing responses, the researchers discovered three key areas of interest that require further observation. With 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, it could help ensure the financial well-being of all Canadians.
The paper, Retirement Consumption, Risk Perception and Planning Objectives, was released by the Canadian Institute of Actuaries on June 29.