A quarter of Canadian pre-retirees believe they will carry at least $10,000 worth of debt into retirement, signifying that debt is still a problem for those preparing for their retirement, according to a survey conducted for Rogers Group Financial Advisors Ltd. in Vancouver.
The firm’s fifth annual Retirement Horizons survey, which targeted retired Canadians and pre-retirees, found that Canadians are mistaken about their level of investment knowledge. While 71% of the survey’s respondents describe themselves as being reasonably familiar with investing and the types of investment available, only 16% could actually answer four investment questions accurately.
For instance, the survey asked respondents for the level of taxation on a realized capital gain. Although 49% provided the correct response of “50%,” more than half (51%) were either wrong or declared they were unsure.
The level of debt and the lack of knowledge are the “two most disturbing results” to come from the report, says Clay Gillespie, managing director of Rogers Group Financial.
“We need to continue to educate all Canadians on their investment knowledge so they can make better long-term decisions,” he adds.
A lack of preparation is also another issue. Only 53% of pre-retirees have a written financial plan and 50% have obtained a power of attorney.
The survey also found that Canadians going into retirement are expecting a median income of between $4,000 and $5,000 per month.
Pre-retiree Canadians are fairly optimistic regarding their prospects for quality of life in retirement, with 97% expecting retired life to be “better than” or “about the same” as the life of an average retired Canadian.
However, when retirees were asked what advice they would give to those preparing for retirement, 57% said, “be realistic with finances and plan ahead.” The second most popular response, with 13%, was “retire early.”
The online survey was conducted by Concerto Marketing and consists of the responses from 400 Canadians between the ages of 47 and 67, who expect to retire within a three to seven-year horizon and have net investable assets of $200,000. Findings also come from 150 Canadians who have been retired for five to 10 years.