More Canadians say they'll need to work past 66 to be able to retire: poll

TORONTO – Economic uncertainty and poor financial planning are being cited as key reasons why a majority of Canadians surveyed in a new poll say plans to retire by age 66 are more of a fantasy than a reality.

Sun Life Financial’s (TSX:SLF) annual Unretirement Index poll, released Wednesday, found that only 27 per cent of respondents believe they’ll retire by 66, a nearly 50 per cent decline from the previous year.

And, for the first time since the insurance giant began this poll five years ago, it found that the number of Canadians who plan on retiring by 66 is nearly equal to the proportion that plan on working full-time past the age of 66 — 26 per cent.

Another 32 per cent of respondents said they anticipate doing part-time work past 66, and 15 per cent said they remain undecided.

“I think the financial crisis has had a lot of impact on people’s household balance sheets, the low-interest environment for sure has had an impact on people’s savings and projections but really the realization is that people are living longer and longer,” said Kevin Dougherty, president of Sun Life Financial Canada.

“So you put all those things together and a lot of people are increasingly saying they’re going to have to stay in the workforce that much longer.”

The survey found that 63 per cent of those polled said they need to work past 66 out of necessity, compared with 37 per cent who said it will be because they want to.

Based on a separate survey of 15,000 consumers in 15 markets around the world, global bank HSBC concluded that, on average, people expect to run out of retirement savings just over half-way into their retirement.

HSBC said average retirement is expected to last 18 years globally and 19 years in Canada, while average retirement savings are expected to last for just 10 years globally and 11 years in Canada.

The global survey was done in July and August 2012 for HSBC by Cicero Consulting and released on Wednesday, one of a number of reports issued by financial services companies during RRSP and tax-planning season.

Canadians have until March 1 this year to reduce their 2012 income taxes by making contributions to their registered retirement savings plan. The deadline for most individuals to pay outstanding income tax balances is April 30.

The Sun Life survey found that on average, Canadian respondents said they wanted $46,000 in annual income to retire comfortably but 59 per cent said they will have less than $250,000 for retirement by 66. Thirty-eight per cent said they’ll have less than $100,000 saved.

Dougherty says the results show that Canadians aren’t doing the math properly and meeting the gap between their expectations and their financial reality.

He urges people to put in place a financial plan — regardless of age.

“What we see in the data is that people who have got a financial plan are that much more likely to be able to retire than people that don’t,” said Dougherty. “It’s never too late … but for sure, the sooner you start, the better off you will be.”

Thirty-eight per cent of those surveyed say they are worried they will outlive their retirement savings, while 31 per cent say they don’t know whether they’ll have enough money to cover medical costs in their golden years.

The poll was conducted by Ipsos Reid from online interviews with a sample of 3,017 employed Canadians between the ages of 30 to 65 years old. It was conducted between Nov. 29 to Dec. 6, 2012.

The survey is said to be accurate within plus or minus two percentage points.