Retirement becoming a distant proposition for many Canadians, survey finds

Retirement becoming a distant proposition for many Canadians, survey finds

Five years after the financial crisis took a bite out of the Canadian economy and investment portfolios, 27 per cent of working Canadians expect to retire at age 66.

RYAN REMIORZ / THE CANADIAN PRESS sOURCE - TORONTO STARA survey by Sun Life Financial has found that a large number of Canadians now plan to work past the age of 65.

Five years after the financial crisis took a bite out of the Canadian economy and investment portfolios, 27 per cent of working Canadians say they expect to retire at age 66, according to a new survey from Sun Life Financial.

That’s down sharply from 2008, when 51 per cent thought they would be ready for their golden years at that point.

Almost one-third expect to work part-time at age 66, and 26 per cent expect to be working full-time, the annual survey found. The remaining 15 per cent aren’t sure.

“That’s really something to reflect on. You have three-quarters of the population thinking about the very real possibility of working past what we’ve always through was the traditional retirement age,” Kevin Dougherty, president of Sun Life Financial Canada, said in an interview.

“The economic crisis has had a very large impact on people’s retirement savings and financial security.”

Nearly two-thirds of those surveyed said that they expect they will need to work past age 66, while the remaining third said they will want to work.

And low interest rates are making it difficult to save at a time when people are living longer. “The good news is that we’re all living a lot longer,” Dougherty said. “As that resonates with people, they’re realizing that at age 65, you need to think about, on average, living another 20 years.”

Over one-third of those surveyed said that there is a serious risk of outliving their retirement savings.

Growing household debt levels are also at play, Dougherty said.

“The crisis has meant that people didn’t pay off debt as quickly as they hoped. As well, for some people they’ve had to borrow to get through some of the challenges in the last few years,” he said.

The survey also found that Canadians have a poor understanding of how much they will need to save. They think they will need an average income of $46,000 a year in retirement, but only aim to have about $385,000 in retirement savings, excluding their home and other property.

In reality, it would take about twice that amount of savings to guarantee that level of income, Dougherty said.

Perceptions are also changing as Baby Boomers get closer to retirement, Dougherty said.

“When retirement was 10 or 15 years away, it was harder to imagine the nature of the challenge but this is reality setting in.”

The online survey of approximately 3,000 working Canadians ages 30 to 65 was conducted between Nov. 29 and Dec. 6 by Ipsos Reid on behalf of Sun Life Financial.