Canadians expecting to be retired at age 66 declines by almost 50 per cent in five years

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Feb 20, 2013, 06:00 ET

Fifth annual Sun Life Financial survey finds only about one quarter of Canadians expect to retire at traditional age as 2008 downturn leaves a lasting impact

TORONTO, Feb. 20, 2013 /CNW/ - Economic uncertainty over the past five years has had an impact on Canadians' retirement plans, as Sun Life Financial's annual Canadian Unretirement^TM Index found that the number of Canadians who expect to be retired at age 66 has dropped to only 27 per cent in this year's study from 51 per cent in 2008, a decline of almost 50 per cent.

For the first time in five years of tracking retirement trends, the index found that the number of Canadians who expect to be retired at 66 (27 per cent) is almost equal to Canadians who expect to be working full-time at 66 (26 per cent). Almost another third (32 per cent) expect to be working part-time at 66 adding up to almost 60 per cent of Canadians who expect to work past the traditional retirement age, while about 15 per cent are not certain.

"The dream of being able to afford a full retirement at age 66 is declining among Canadians, it's being replaced by the reality that many people expect to be working beyond the traditional retirement age," said Kevin Dougherty, President, Sun Life Financial Canada. "The aftermath of the financial crisis of 2008 has had a lasting impact with more Canadians expecting they will need to work longer as a result."

The survey revealed that more Canadians are expecting to work past 66 because of necessity and fear of outliving their savings:

63 per cent expect they will need to work past 66 compared with 37 per cent wanting to work.
With Canadians expecting to be retired for an average of 20 years, over a third (38 per cent) say there is a serious risk of outliving their retirement savings.
Almost a third (31 per cent) of Canadians are not at all confident that they will have enough for medical expenses.

The survey also found that Canadians have a gap in their thinking about retirement savings. They anticipate requiring an average income of $46,000 per year for their retirement, yet they are only aiming to have $385,687 in retirement savings (excluding their home and other property).

At the same time, only a quarter of Canadians (23 per cent) stated saving for retirement was their number one priority. Paying down debt or credit cards was the number one priority for nearly half of Canadians. The priority placed on saving for retirement varies with age. It was a top financial priority for 37 per cent of early Boomers in the 57 to 65 year age group. The number dropped to 12 per cent of people in Generation X - 30 to 46 year old age group - who say it's their top financial priority.

In terms of their investments, interest rates are on the minds of Canadians. Twice as many Canadians (25 per cent) want the interest rate go up in 2013, compared with the number who want to see it decline (13 per cent). There are also differences in age groups. Thirty one per cent of early boomers (age 57 to 65) want to see the interest rate rise compared to 24 per cent of Gen Xers (age 30 to 46) and late boomers (age 47 to 56).

For more key findings and results on the 2013 Canadian Unretirement^TM Index, visit www.sunlife.ca/unretirementindex. For more information on retirement, visit Brighterlife.ca.

Canadians can calculate their own personal Unretirement^TM Index score, which measures their outlook on retirement, at www.sunlife.ca/unretirementindextool.

Methodology

These are some of the findings of an Ipsos Reid poll conducted between November 29 and December 6, 2012, on behalf of Sun Life Financial.

For this survey, Ipsos Reid conducted online interviews with a sample of 3,017 working Canadians from 30 to 65 years of age from Ipsos' online panel. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe.

The precision of Ipsos online surveys is measured using a credibility interval. In this case, the survey is accurate to within + / - 2 percentage points had all Canadian adults been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to methodological change, coverage error and measurement error.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Vietnam and Bermuda. As of December 31, 2012, the Sun Life Financial group of companies had total assets under management of $533 billion. For more information please visit www.sunlife.com.