Sep 20: BEST FROM THE BLOGOSPHERE
September 20, 2021
One in five over 50 will delay retirement plans: RBC
The pandemic has made many Canadians rethink their retirement agenda, according to new research from RBC, covered in a recent article in Wealth Professional.
According to the article, the study – called the 2021 RBC Myths & Realities Poll – indicated that nearly 20 per cent of Canadians 50 and older have decided to change their retirement date.
There are a number of concerns outlined in the research.
A total of 21 per cent of those with assets of $100,000 or more fear they will outlive their retirement savings. Most of this group, the article continues, “believe they will need $1 million saved for their retirement but more than three quarters are at least $300K short of this.”
It’s worse for those with less savings, the article notes. Those with $50,000 in assets think they will need $533,000 in their savings pots, but are “an eye-watering $473,000 short of this goal,” Wealth Professional reports.
So what are people considering in what the article calls a Retirement Rethink?
- 22 per cent are “thinking more about where they will live in retirement,” with 20 per cent “deciding where they don’t want to live,” typically meaning not in a retirement home, the article states.
- Fifteen per cent are said to be reviewing or updating their wills; 17 per cent are “taking stock of their financial affairs,” and 16 per cent “realizing life is short” and are taking up new activities and hobbies, Wealth Professional notes.
Other actions they are thinking of taking, the article concludes, are to “stay in their own home and live more frugally,” to return to work, to downsize or move home, or ask family members for help.
What do we make of all this?
For starters, the cost of a dream retirement condo, cottage or timeshare has gone up significantly lately. It’s not so easy to sell your city house and pick up a cheaper one somewhere else, as prices are up everywhere. This and the massive cost of long-term care, in the thousands per month in most places, makes one’s existing home have new appeal. After all, it is either paid for or in the process of being paid for, you don’t have to pay moving expenses, realtors and lawyers to stay put, and your costs of living are known and predictable.
The article makes the point that having a financial planner makes sense in terms of establishing your financial goals for retirement. For instance, if you plan to stay home and live frugally, will you really need $1 million? It’s important to try and estimate, in advance, exactly what you will need to live on when you live the workforce.
If you are among those Canadians who worry about running out of money in retirement, be aware that the Saskatchewan Pension Plan offers annuities as an option for SPP retirees. With an annuity (they come in various forms with different options) you forego the risk of running out of money in retirement, as annuities provide you with a lifetime income stream. And you won’t have to put your sand wedge down in mid-swing to worry about investment decisions; with an annuity, there are none. Check out SPP, celebrating its 35th year of delivering retirement security, today!
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Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.