A new CIBC poll has found that 77% of Canadians worry about not having enough money in retirement — and fewer than one-third of Canadians have a financial plan for that life stage.
CIBC polled 1,522 randomly selected adults who are Maru Voice Canada panelists in August and found that the fear of running out of money in retirement is highest among Gen Xers (those currently between the ages of 35 and 54), at 83%, females (80%), and those living in B.C. (80%) and Alberta (83%).
Of the respondents polled, 46% are employed full-time and 26% are already retired.
When asked about their specific concerns surrounding having enough income in retirement, 53% of respondents said they are worried about encountering unexpected health issues; 45% said they’re worried about market inflation and increased cost of living; and 41% said they’re worried about figuring out how much they can live on each month when they do retire and the best sources for retirement income.
For those who do have money saved for retirement, 35% said they’re worried they’ll outlive it.
That concern is warranted, given we are living longer than we used to, and that interest rates are low — meaning older Canadians who rely on passive income from savings accounts are getting less of it. Those who do have money saved may not see high returns on that money between now and the time they retire, leaving them with less than they planned for.
According to the poll, 74% of respondents say they’re very/somewhat confident about managing their own investments in retirement. Gen Xers and Millennials are the less confident demographics, at 70% and 71% respectively, compared with Boomers at 80%.
Only 22% of respondents said they’re “very confident” they can create a comfortable monthly income in retirement, that’s made up of CPP, OAS, private pension and other assets and savings. And 51% are “more than happy” to live a simpler lifestyle in order to make their retirement savings last longer.
That said, respondents who do have a retirement plan currently in place aren’t confident with it (26%), and 11% said they don’t have any savings at all, and instead will rely entirely on the Canada Pension Plan and/or the Old Age Security benefit.
Relying solely on these government benefits might work for low-income individuals, but not for higher earners, who experts say would be better maxing out their TFSAs and RRSPs every year.