An increasing number of Canadians believe they will be forced to take their retirement a little later than previously hoped, according to a recent study from property and casualty insurer AXA.

The 2010 edition of the Retirement Scope study also reveals that majority of Canadians (57%) are unable to estimate their retirement income, and people aged 35 to 49 do not seem to be further ahead than their younger counterparts when it comes to retirement planning.

The AXA study offers both local and international perspectives and sheds light on different aspects of retirement, with a broader reflection about Canadians’ state of preparedness for this stage of life and underlining the importance of discussing it in advance.

“As insurance and investment professionals, retirement is something we have a great deal of responsibility towards. That’s why AXA has been tracking the phenomenon closely,” says Robert Landry, executive vice president, life and health Insurance for AXA Insurance.

Early retirement? Think delayed retirement

Among the working population, the five-year gap between the “ideal age” and the “planned age” for retirement, i.e. 57 versus 62, has increased since the previous edition of the survey. “This gap is not surprising in a country where a major part of retirement income comes from personal savings,” says Landry. Workers have seen their retirement savings seriously shrink in value, and many of them are forced to consider working longer than planned and longer than their elders did.”

But no matter what their current stage of life—young, midlife or end of career—those surveyed believe that they will still be able to stop working on average three years before the legal retirement age of 65.

One area of concern is that 10% of those surveyed have no idea at what age they will retire, signalling that these respondents have not yet started to plan their retirement.

Grey area about retirement income

In spite of a great deal of awareness about the need to plan for retirement, more than half of working Canadians (57%) admit that they cannot estimate, even approximately, the retirement income they will likely need.

While since 2006 there is a trend toward being able to estimate this amount better, some survey results still raise concern:

> the lower their income, the less people in the workforce know what their retirement income will be;
> among respondents aged 35 to 49, 60% still don’t know what their retirement income will be; and
> 42% of those over 50 still don’t know how to estimate their retirement income.

“These facts are worrisome because, without exception, we’re talking about groups of Canadians who are closer to retirement or who would benefit from planning their retirement more actively,” says Landry.

Retirement: a matter of planning

The results of the survey show that people aged 35 to 49 do not appear to be much further along in their retirement planning than younger generations, even though, paradoxically, they have fewer years left to do so. Some of them (10%) even go so far as to say that they will never plan for it.

However, it seems that on average, today’s workers are learning from the experience of retirees and starting to plan their retirement earlier. Current retirees say they started planning their retirement on average at age 37, but say that they should have done so three years earlier.

Canadians relying on personal savings

The study found that Canada stands out from other countries with the marked tendency—29% among the working population and 26% among retirees—to believe that increasing personal savings is one of the best ways to ensure a retirement income. This is an indicator that Canadians take their retirement in hand and count more on themselves for retirement income.

The survey included over 20,000 working and retired people from 26 countries and was conducted in April 2010 by a consortium of polling firms headed by GFK Group and represented in Canada by CROP.

The countries studied were: Australia; Canada; China; France; Germany; Italy; Portugal; Spain; Japan; Hong Kong; Indonesia; Malaysia; the Philippines; Singapore; Thailand; the United Kingdom; and the United States.

IE