Respondents: Having money to last a lifetime not a commonly held belief
TORONTO, June 8, 2015 /CNW/ - A HomEquity Bank study of Canadians aged 55+ shows that most respondents believe that if they retire at 60, there is a good chance their money will run out before they are 80.
Conducted by The Brondesbury Group, the study is based on the results of a February 2015 national, online survey of 1001 Canadians. The pre-retired group (337) consist of those who plan to retire within 10 years as well as other working Canadians over the age of 55. The retired group (664) consists of those who have retired. Only current and former homeowners were eligible for the survey.
When it comes to savings, 29% of pre-retired and 35% of retired respondents have saved less than $50,000 for retirement.
"In retirement, most people adapt their lifestyle to what they have, but for some it is just not possible. When that happens they turn to the money locked in their home to give them a way to be comfortable. They have to confront the emotion they have invested in their home and learn to see it as an economic asset too. It's not easy," explains Dr. Ed Weinstein, president, The Brondesbury Group.
Sources of income show that more than half of all respondents have a company pension plan, while 76% of pre retired and 51% of retired have an RRSP or similar retirement savings. However, the differences between the pre-retired and retired suggest people may be overestimating their ability to accumulate unsheltered savings.
Cost of living (expected versus actual) shows there's a good understanding of current costs in retirement, what things will cost in the future and what retired respondents are spending to meet expenses. Also, retired respondents learn to adjust spending as real income declines due to inflation, however 14% say they don't have enough money.
About two out of 10 respondents expect their savings/investments to run out within five years.
The study shows 47% of pre-retired and 56% of retired respondents stating that 'staying in my home is critical for my quality of life.'
Pre retired with debt (71%) report about $25,000 in debt and drops to about $20,000 among the retired (50% with debt). However, StatsCan reports a median value for debt of about $93,000 for ages 55-59 and $32,000 for age 70 to 74. This tells us that people likely overlook some debt and underestimate their total debt.
The study may be found online at http://www.homequitybank.ca/2015-retirement-study/
About HomEquity Bank
HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution www.chip.ca. It was founded 28 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.
SOURCE HomEquity Bank
Image with caption: "Here, HomEquity Bank presents information on Borrowing and Debt, obtained through its ?2015 Retirement Study: Dreams & Reality?. It shows the types of debt as well as levels of debt. (CNW Group/HomEquity Bank)". Image available at: http://photos.newswire.ca/images/download/20150608_C6305_PHOTO_EN_17714.jpg
Image with caption: "Here, HomEquity Bank presents information on Sources of Retirement Income, obtained through its ?2015 Retirement Study: Dreams & Reality.? It shows amount of money saved as well as cost of living expenses. (CNW Group/HomEquity Bank)". Image available at: http://photos.newswire.ca/images/download/20150608_C6305_PHOTO_EN_17715.jpg
Image with caption: "Here, HomEquity Bank presents information on Using the Home to Generate Income, obtained through its ?2015 Retirement Study: Dreams & Reality.? It also showcases attitudes toward the home. (CNW Group/HomEquity Bank)". Image available at: http://photos.newswire.ca/images/download/20150608_C6305_PHOTO_EN_17716.jpg
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