It’s the “end of retirement as we know it,” according to a report released Monday by Toronto-based Bank of Montreal (BMO) Wealth Management. As Canada experiences longer life expectancies, low fertility rates and, as a consequence, an aging population, the nature of retirement is changing.
Based on a survey of Canadians aged 55 and over, the report finds that Canadians are extending their working years, as 47% of respondents are afraid of running out of money and 51% are worried about the health problems that can come with living longer (and the associated costs).
“In order to have the long and fulfilling retirement that most Canadians want, effective financial decisions need to be made about savings strategies, retirement and estate planning goals,” Chris Buttigieg, director of the wealth institute at BMO Wealth Management, says in a statement.
BMO offers a series of tips for people navigating these decisions in 2018. First, communication between spouses and partners is critical. Weighing compromises and doing financial planning together can “help both partners achieve their financial goals,” BMO says in a news release.
Additionally, gifts or support for adult children or grandchildren should be weighed within a larger context to ensure they don’t compromise stability in retirement. Those approaching retirement should consider the cost of healthcare and long-term care, have a tax-effective decumulation strategy (that includes income-splitting if applicable), plan for charitable giving and have proactive conversations with legal professions about wills and estate planning.