'There have been economic shocks throughout time, but the last couple of years have tested many people'
Rising inflation and cost of living are taking a toll when it comes to Canadians’ retirement plans.
More than half (54 per cent) of those 55 and older now say they are delaying retirement because of the increased costs, while 62 per cent have already delayed retirement because they do not have enough savings or investment.
Another 40 per cent have delayed leaving work because they have too much debt, finds a survey by Bromwich+Smith, which offers debt relief solutions, and Advisorsavvy, a source for financial advisors
“Canadians are all feeling a bit exhausted from the last two years, between multiple waves of COVID-19 and a tattered economy,” says Laurie Campbell, director for client financial wellness at Bromwich+Smith.
“For those close to retirement, 2022 might seem like the best year to do so. But with inflation still high and bank accounts and retirement savings being depleted, it might be wise to ask yourself: ‘Can I retire in 2022?’”
Other reasons for delaying retirement include:
- children requiring financial support (26 per cent)
- loving their job too much to quit (23 per cent)
- the COVID-19 pandemic (21 per cent)
- taking care of their partner or spouse (13 per cent)
- taking care of a parent or other family member (10 per cent)
Almost one in five (18 per cent of) Canadians aged 50 and up said they were planning to push out their retirement date, according to a 2021 report from RBC.
Currently, 21.8 per cent of working Canadians are aged 55 to 64 — an all-time high in the history of Canadian censuses, according to Statistics Canada.
Retirement expectations
Life in retirement is not looking great for many, according to Bromwich+Smith and Advisorsavvy’s survey of more than 1,500 Canadians conducted from June 9 to 12, 2022.
More than seven in 10 (71 per cent) say they are worried about running out of money after they retire while 24 per cent say they are worried they’ll have to go back to work to afford the cost of living.
But others still have it worse. Sixty-three per cent worry that they’ll never have enough money to retire. Another 25 per cent will have to sell their house in order to put an end to their working days.
“The results of the survey are somewhat dispiriting,” said Solomon Amos, founder of Advisorsavvy. “There have been economic shocks throughout time, but the last couple of years have tested many people, and put the importance of proper retirement planning into plain view.”
Just 44 per cent are confident they will have enough money to retire as planned — that’s down 10 per cent from last year, according to a report released in February.
But employers can help, says Best Money Moves, a service designed to help people measure their financial stress and then dial it down. Improved retirement benefits can also “be a great way for employers to keep up with the competition in their industry.”
Offering workers a strong retirement solution is not only a nice thing to do for the workforce, there is a strong bottom-line argument involved, according to a previous panel.
“Retirement benefits are a highly effective form of compensation that can deliver potentially up to a million dollars of value over the course of the lifetime. They’re ranked by employers as the number one or number two tool for attracting and retaining talent; they can be highly effective in reducing financial stress,” says Alex Mazer, cofounder and co-CEO at Common Wealth in Toronto.