Most (71%) baby boomers can’t wait to spend their time as they wish in retirement, but 42% of those not-yet-retired expect managing cash flow in retirement to be more difficult and 37% are worried they do not have enough money to do what they want, according to the third annual RBC Retirement Myths and Realities Poll.
Only 52% of those expecting to retire within a year have a detailed budget as part of a financial plan. Furthermore, the survey found that retired boomers require 60% of their annual pre-retirement income, up from 56% in 2011 and 2010.
“When your retirement is years away, you are primarily focused on growing your retirement savings. Then when your actual retirement date nears, you need to get much more specific on two fronts,” advises Amalia Costa, head, retirement strategies, RBC.
“First, you need to understand what your spending will be in this new phase of your life, including how much of this is for living expenses and how much is for more flexible lifestyle expenses. Then, you need to figure out how to most effectively use those accumulated savings, along with your other retirement resources to create a new pay cheque for yourself — one that aligns to your spending requirements.”
Costa notes that the poll results show that only half of those within a year of retirement have created a detailed budget. This first step can go a long way towards providing Canadian boomers with a greater sense of control and certainty — translating into less anxiety and more enjoyment in retirement.
The third Annual RBC Retirement Myths & Realities Poll, which examines Canadians’ expectations and experiences in retirement, was conducted by Ipsos Reid from February 24 to March 12. For this survey, a national sample of 2,833 adults aged 50 and over with household assets of at least $100,000 from Ipsos’ Canadian online panel was interviewed online.