Canadians nearing retirement (aged 55-64) are confident they have enough money to live the retirement lifestyle they desire, but many don’t know how much retirement income they will need nor how much their company and government pensions will provide.
That’s according to new research examining Canadians’ knowledge of their pension plans and their retirement income from Winnipeg-based Investors Group.
Sixty-nine per cent of Canadians approaching retirement age were unaware of what the maximum monthly payout from government is for Canadian Pension Plan (CPP) or Quebec Pension Plan (QPP) and Old Age Security (OAS), yet more than eight-in-ten of this age group say they plan to use this as a source of retirement income, and more than one third anticipate this will be their primary source, according to a recent Investors Group survey.
Sixty per cent of Canadians say they plan to use an employer pension as a source of income and 37 per cent say this will be their primary source.
However, of those who say they have workplace pensions and plan to rely on it as their primary source of income, more than half (55 per cent) did not know the monthly benefit they can expect.
Seven-in-10 say that they will have enough to pay the cost of living in retirement, yet when asked what they anticipate their monthly cost of living to be, 42 per cent of unretired Canadians did not know.
The research revealed that as Canadians approach the age of retirement, a significant number are still not aware of what it will take to support their lifestyle with 39 per cent of Canadians aged 55-64 were still unclear on what to expect.
Nearly three-quarters (72 per cent) of unretired Canadians are confident they will be able to maintain their current lifestyle in retirement. This number jumps to 91 per cent among Canadians working with a financial advisor.
While 39 per cent of Canadians say that confidence in their own money management has gone up over the last 10 years, 58 per cent say their confidence in younger generations’ ability to save adequately for retirement has gone down.
In addition, (66 per cent) of Canadians are less confident in governments’ ability to continue to provide an acceptable level of pension and retirement benefits.
“While the survey indicates that Canadians are approaching retirement with confidence, it also identifies the need for Canadians to gain a better understanding of what their ideal financial future looks like so they can build a plan to get there,” said Dave Ablet, director, tax and estate planning, Investors Group.
Survey data was collected using computer assisted telephone interviewin via the Harris/Decima teleVox omnibus. Overall, 1,010 responses were collected nationally between January 23 and 27. The survey is considered accurate to a margin of plus or minus 3.1 per cent, 19 times out of 20.