Most Canadians – 80% – would rather have an improved pension, or any pension, than a higher salary. At least this was the main conclusion of a recent survey ran by Ottawa based research company Abacus Data1 on behalf of the Healthcare of Ontario Pension Plan (HOOPP).
The survey, which gathered the views of 2500 people, reveals profound and growing concerns among Canadians about their financial perspectives towards retirement. According to the report, only about 44% of Canadians have access to a workplace pension. About 49% of those without a workplace pension, say they have nothing saved for retirement.
In a comment on the findings, David Coletto2, chief executive officer of Abacus Data, said: “Canadian public opinion is optimistic, grateful, but increasingly anxious. There’s a broad understanding across the country that Canadian pension quality is on the decline.”
Jim Keohane3, HOOPP president and CEO, also reported: “It is clear that Canadians have a high level of anxiety around retirement security and that we, as a country, need to talk about how to address this growing concern.”
Retirements now for 30 plus years
The situation gets more challenging when we consider that the life expectancy in Canada has steadily increased during the past century. While in 1960, the average Canadian4 was expected to live 71 years, now men are expected to live 80 years and women 84 years.
Without a doubt, these are lovely news that attest to Canadian’s quality of life. However, they also mean that retirements are now projected to last 30 or more years.
Failure to plan means planning to fail
The survey ran by Abacus Data also showed that more than 80% of respondents believed governments should implement new regulations around pensions and saving plans. However, in the present circumstances, putting effort into pension and retirement income planning is probably the best alternative to reduce the anxiety most Canadians said to experience in the survey. Some of these retirees, not having saved for enough time, will have to tap into their home equity to fund their retirement. Others will have to work and save for longer years.
If you already have a pension plan, and if you have been saving for enough years in advance to your retirement date: well done, you are privileged. Just remember keeping financial well-being is a continuous duty. Even those retirees who have had pension plans for several years should be careful to adjust their expenditure to their long-term portfolio performance. This will ensure their wealth remains over time.
In conclusion, a well-prepared plan can reduce anxiety and act as the roadmap to reach your retirement goals successfully.