Nov 29: BEST FROM THE BLOGOSPHERE
November 29, 2021
Pandemic, spectre of inflation changing Canadians’ retirement attitudes: Fidelity
Pandemic-driven concerns over the cost of later-life healthcare, coupled with fears about the return of inflation, were key concerns identified in a recent survey conducted for Fidelity Investments Canada.
In a media release, the study, titled 2021 Fidelity Retirement Report, cited both “longstanding and emerging” factors influencing the retirement thinking of Canadians.
“Change is the big story in this year’s report. The global health crisis and the cost of goods and services going up are influencing how Canadians envision their retirement, what they value and are worried about, the timing of retirement and so much more,” states Peter Bowen, Vice President, Tax and Retirement Research, in the media release. “Another significant story is resilience. We found that Canadians who work with a professional financial advisor feel optimistic and better prepared for what’s ahead.”
These are definitely interesting times to be living through. The survey found that 71 per cent of Quebec pre-retirees retained “a positive outlook on retirement,” compared to B.C. pre-retirees, only 62 per cent of whom were optimistic about their retirement plans, the release reports.
Overall, the research found that “73 per cent of retirees and over half of pre-retirees” feel COVID-19 “has changed the way they live (expect to live) life in retirement,” the release notes.
While 60 per cent of pre-retirees “with a written financial plan” are now budgeting for retirement-related healthcare costs, only 25 per cent of pre-retirees say they have a written financial plan, the release notes. This means “there are still many Canadians who may not have considered healthcare in their plans,” the Fidelity release observes.
More than half – 56 per cent – of pre-retirees surveyed “are considering how the rising cost of living may affect their retirement plans.” B.C. pre-retirees are the most concerned about rising living costs – it was seen as a worry for 62 per cent of B.C. residents surveyed, the release notes.
On the planning and advice front, the survey found that “91 per cent of pre-retirees with a plan have a positive outlook” on their retirement, and 86 per cent of those with a plan say they worked with financial advisers, the release notes.
The takeaway from this research seems to be that folks closing in on retirement – plus those already there – are recognizing they may have to set aside money for care in the later years of their retirement. While we hope that everyone is able to avoid costly care in their latter years, it seems to be a growing concern – and the cost of long-term care can be very high.
Inflation has not reared its ugly head for many decades, but those of us who were in the workforce back in the 1970s and 1980s will remember that yes, we got big raises at work every year, but those raises were never enough to keep up to the crazy jumps in costs of goods, or double-digit interest on things like car loans.
An approach to both problems, of course, is to boost your retirement savings before you get to the golden years. If you don’t have a workplace pension program, hop on board the Saskatchewan Pension Plan and its do-it-yourself savings program. For 35 years, SPP has been converting the savings of folks like you into future retirement income, handling the heavy lifting of weathering the investment storm for its membership. Check them out today!
Join the Wealthcare Revolution – follow SPP on Facebook!
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.