Most Canadian retirees feel confident about their finances at the moment, but are wary of what the future will bring. A new CIBC poll of 867 retired Canadians, conducted by Leger Marketing, reports that most retirees are currently living the retirement they envisioned. However, more than a quarter (28%) are worried they won’t be able to sustain their lifestyle in the long term and fear they’ll run out of money too soon.
“While it is positive to see that a majority of retired Canadians are living the retirement they hoped for, our poll findings also show there is concern around whether their retirement savings will sustain them in the years to come,” says Christina Kramer, executive vice president, retail distribution and channel strategy at CIBC. “There are some unique factors facing today’s retirees as they look to the years ahead, including low interest rates on savings and the need to make their retirement funds last longer than previous generations, which makes long-range planning even more important.”
Regionally, retirees in Quebec, Manitoba and Saskatchewan are the most content with their current situation, with 74% saying they’re living the retirement they planned for. Retirees in B.C. were the least satisfied, with just 60% reporting being satisfied. When looking ahead, nearly half (45%) of B.C. retirees report they’re afraid of running out of money for retirement. Atlantic Canadians are the most optimistic, with only 21% concerned about long-term finances.
The CIBC poll notes that, while many Canadians focus on how much they need to save in order to reach retirement, it is just as important to focus on how to convert savings into income in order to make that money last. Only 62% of retired Canadians say they have a plan to help them determine how long their savings will last and how much they can withdraw each year to support their lifestyle. Among those with a plan, 31% report having developed it with the help of an advisor and the same number say they developed a plan on their own.
Poll results also show that more than half of retired Canadians believe a short-term financial shock could create a challenge. Given their current income, 54% said that taking on a new $500 monthly payment for an unanticipated expense would be unmanageable.
“It’s important to plan for your long-term retirement goals, but your plan should also include an emergency savings component,” said Kramer. “You may have to re-evaluate how much you are able to withdraw each year to ensure you do have savings that could be used in the event of an emergency to avoid taking on a new monthly debt payment that can impact your lifestyle.”