December 12, 2022

Does a written retirement plan help Canadians manage fears about inflation and healthcare costs?

Recent research from Fidelity Investments Canada finds that those of us with “a written financial plan” are “more financially, socially, physically and emotionally prepared for retirement than those without one,” and may feel more ready to face inflation and rising healthcare costs.

Results of the research are highlighted in a media release from Fidelity.

“With stubborn inflation, market volatility and global uncertainty, it’s not surprising that Canadians are anxious about their future and their retirement,” states Peter Bowen, Vice President, Tax and Retirement Research, Fidelity Investments Canada ULC in the media release. “However, Canadians continue to demonstrate the value of advice and planning: those with financial plans feel more secure and prepared for retirement. Those without a plan should seriously consider the benefits it could have for their overall well-being,” he continues.

The research found that 83 per cent of those with a written financial plan felt “financially prepared” for retirement, compared to 47 per cent of those without one. Eighty-three per cent of those with written plans say they worked with a financial advisor to get one, the release notes.

However, only 23 per cent of those surveyed say they have such a plan. Amongst Canadians, Quebecers have the highest proportion of citizens with a written financial plan (30.7 per cent), the release adds.

The research took the temperature of Canadians on their main retirement concerns.

Rising inflation and market volatility were identified by pre-retirees as “key risks” through the research, and concerns over these two factors have increased dramatically since this annual study was launched eight years ago, the release states.

For those already retired, inflation was the top risk identified, with healthcare costs seen as the second highest.

Sixty-two per cent of pre-retirees surveyed felt inflation is “holding them back from retiring when they would like,” a jump from 56 per cent in last year’s edition of the research, the release notes. Of that same group, 66 per cent felt “that inflation will reduce the purchasing power of their savings and have a negative impact on their standard of living,” the release points out.

Ontarian pre-retirees are the most concerned about inflation’s impacts — 69.9 per cent of them feel inflation is a top concern, while overall Canadians worry “the rising cost of living brought on by higher inflation is exacerbating these savings concerns and making many Canadians feel less comfortable about their retirement plans,” the media release concludes.

Lots to digest here. Clearly, having a written financial plan authored by an advisor seems to equip many of us with confidence. Inflation is trickier, and we can see that many folks thinking of pulling the chute on work may worry about what their spending power (on a reduced income) will be like when they land.

If you have a workplace retirement program of some kind, you’re ahead of the game here. If you don’t have a program — or, as the owner of a business, would like to offer one to your employees as a way to attract and retain them — have a look at the Saskatchewan Pension Plan. SPP’s open, voluntary defined contribution plan has been successfully delivering retirement security to both individuals and organizations since 1986. Find out what SPP can do for you 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.

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