Working canadians have a rosy outlook for their retirement years and are preparing for it earlier in life than the previous generation. But a significant gap still exists between what workers hope to achieve in retirement and what they actually accomplish.

A study by the XA Group, parent of Montreal-based insurance company AXA Canada, polled 6,915 working and retired people in 11 countries to gain a better understanding of attitudes toward retirement. The study is entitled Retirement Scope: Retirement, dawn of a new age.

Canadians rank among the least likely to oppose an increase in the legal retirement age, which is currently 65. Their attitude may be explained by the perception of the age at which one is considered “old.” Canadians, particularly those who are retired, believe that old age comes at age 75. Women are even more generous in their perception, claiming old age arrives at 82. These perceptions stand in sharp contrast to other countries, particularly respondents from Japan and Hong Kong, who cite ages 59 and 57, respectively.

On a similar note, Canadians are among the most convinced of the value of work done by people over age 65. Nearly 90% of working Canadians and 92% of retired Canadians say that people aged 65 and over can produce quality work. Again, the opinions collide with respondents from other countries, particularly those in Germany, Italy and Spain. In those countries, only 66%-70% of respondents share the same view.

Retired, not old

“Canadians don’t equate retirement with old age. Far from it,” says Lise Allard, communications manager, AXA Canada. They feel fully able to provide high-quality work and feel that way for a long time after reaching legal retirement age.”

The study also uncovered significant discrepancies between the ideals of the working population and the reality faced by retirees. The survey indicates that 58% of working Canadians hope to engage in some form of income-earning activity (a part- or full-time job) after retirement. In fact, only 14% of Canadians continue to work after age 65. By comparison, only 31% of French working people anticipate working after retirement, and only 4% of retirees actually do.

The survey doesn’t offer explanations for the gap, but Allard points to differences in the “cultural and economic environment” for the discrepancy, adding that Canadians’ views are similar to those in the U.S. and Britain.

A similar pattern was observed in other post-retirement plans. For instance, almost 50% of surveyed worked say they intend to travel, and only 20% of retirees actually do so. Similarly, 40% of workers plan to vacation with their children, and only 22% of retirees do. Although the findings are discouraging, it may reflect the fact that the behaviour of future retirees may not match those of current retirees. Today’s working people may, in fact, follow through with their retirement intentions.

The survey also uncovered a somewhat predictable link between financial preparedness and a happy retirement. About 70% of retirees who describe themselves as “very happy” say they have sufficient income. On the other hand, two-thirds of retirees who feel they are “unhappy” say their retirement income is insufficient.

Encouragingly, retired respondents in Anglo-Saxon countries — Australia, Canada, the U.S. and Britain — were much more likely to report being “very happy” in their post-working lives. The study suggests this is because respondents in those countries attach more personal responsibility to funding their retirement than respondents in other countries and, therefore, are much more likely to be financially prepared. Eight-five per cent of both working people and retirees in those countries believe they are individually responsible for their retirement and are ranked among the most likely to seek out advice from professionals.

“Canadians obtain much of their retirement information from a number of sources, above all from banks, insurance companies and financial advisors,” says Allard. “Working Canadians also look to friends and family for advice, whereas retired Canadians are more likely to turn to their former employers.”

Not responsible

By contrast, respondents from Europe and Asia are less likely to hold themselves personally responsible for funding their retirement; they are similarly less likely to anticipate active retirement lives. Fewer than half — 47% — of the working and retired people in Europe were considered “active and dynamic,” a term the survey uses to describe those with healthy, optimistic views of retirement.

@page_break@Similarly, retired respondents in Japan and Hong Kong are dissatisfied with their financial resources, with only 38% reporting “sufficient” or “completely sufficient” retirement income. Nearly half say their standard of living declined after retirement.

The study identified several critical factors that may determine the difference between enjoying retirement and simply surviving it:

> the will and capability to pursue an active lifestyle;

> access to sufficient financial resources during retirement;

> financial planning to ensure necessary retirement income;

> balanced, reasonable efforts to maintain a healthy lifestyle;

> psychological preparation for retirement.

Again, Canadians are among the most likely to have addressed these factors, Allard says.

“Retirement is an active time in Canadians’ lives. It gives them the opportunity to engage in rewarding activities, such as travel and volunteer work. People actually favour activities that require energy and an investment of their time,” she says.

AXA published its first Retirement Scope in 2003, and included Canada in 2004. The results of the 2006 survey are based on interviews conducted between July 14 and Aug. 21, 2005. IE