Canadians believe they'll work longer than the traditional retirement age of 65, they're less confident about their retirement outlook, and they're concerned about their financial well-being.
Toronto (8 March 2011) – Canadians have become less optimistic about retirement as the recovery from the global recession continues. The average Canadian expects to retire at age 68, according to the 2011 Canadian Unretirement Index, released by Sun Life Financial today. That's three years later than respondents reported in the same study a year ago.
The downturn has had the most significant impact on the retirement expectations among those earning less than $50,000 per year. They're less confident about how prepared they are for retirement, and they expect to retire later - at age 70 on average - as a result. Canadians who earn over $100,000 expect, on average, to retire at the traditional age of 65. Income is also a factor when it comes to retirement activities:
- Those with incomes over $100,000 are inclined to cite personal fulfillment for continuing to work: 71% say they'll work past age 65 to stay mentally active, and 60% say they'll keep working because they enjoy their job or career.
- Many of those making less than $50,000 per year (68%) say a main reason for working past age 65 is to earn enough money to pay for basic living expenses.
As Canadians age and approach the traditional retirement time frame, they anticipate working longer than younger Canadians predict:
- Canadians in their thirties and forties expect to retire at age 67.
- In the 60 - 65 age group, the expected retirement age rises to almost 72.
- Gender also plays a role in our views of retirement:
- While just over half (55%) of all men and women expect to be working to some extent past age 65, more men than women expect to be working full time (24% of men vs. 17% of women).
- Timing for retirement is also different, with men expecting to work almost two years longer until they retire (close to age 69 for men vs. approximately age 67 for women).
The reasons for expecting to work past 65 vary by gender. More men than women say they will be working because they want to work (44% for men vs. 34% for women), while women are more likely to anticipate they will need to work (67% for women vs. 57% for men).
The difference a pension plan makes
The 2011 Canadian Unretirement Index shows that almost eight out of ten Canadians (79%) don't have a financial plan. However, the survey results also illustrate that Canadians who do have a written financial savings plan are more:
- confident about being able to take care of basic living expenses in retirement (84% with a plan vs. 48% without a plan).
- confident about having enough money to pursue their hobbies and interests in retirement (73% with a plan vs. 32% without a plan).
- confident about having enough money to enjoy the lifestyle they want in retirement (71% with vs. 30% without a plan).
- satisfied with what they're saving for retirement (67% with vs. 26% without a plan).
Other survey results show that the confidence of working Canadians, is down significantly from prior years, to 39 in 2011, from 50 in 2008 and 51 in 2009. (The lower the index number, the more negative or pessimistic the outlook is on issues that influence retirement.) Canadians believe they'll work longer than the traditional retirement age of 65, they're less confident about their retirement outlook, and they're concerned about their financial well-being.
The trend is towards less optimism in 2010. One possible reason for the drop in overall confidence is that at the end of 2009, many Canadians were hopeful the recession was over in this country - and that recovery would be swift. While the recession did end, Canada did not witness the extensive economic rebound it had hoped for, with unemployment still high, gross domestic product increasing at low levels, and continued worries about the health of other countries that could impact our economy.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE