Canadians want the best of both worlds when it comes to retirement income planning — a guaranteed income stream and the flexibility to access funds whenever they choose.

Retirees and pre-retirees alike are looking for guarantees, but are reluctant to make concessions, suggests a report released Wednesday by the BMO Retirment Institute.

The report identifies what Canadians believe are important elements of a retirement income plan (flexibility to deal with unexpected events, maintaining current lifestyle, guaranteed income, not outliving their money), and examines why it will be difficult, if not impossible, for most to attain all of these elements without making sacrifices.

According to the report only 40% of those planning to retire in five years are willing to give up control over some of their retirement savings in order to receive guaranteed income for life.

As well, 67% of all respondents believe flexibility to deal with contingencies is more important than ensuring a predictable retirement income for life.

Other key findings:

> The largest concern among survey respondents was having enough money to survive on a fixed income (39% of retirees, 45% of pre-retirees)

> The biggest risk identified by respondents when planning for their retirement was unexpected costs (31% for retirees, 27% for pre-retirees), followed by outliving their retirement assets (18% for retirees, 19% for pre-retirees).

> When asked about considerations important to them in retirement planning, 93% of all survey respondents said that having enough money to maintain their current lifestyle was important.

The study also reveals 32% of pre-retirees and 42% of retirees are not prepared to give up control of their capital in order to receive guaranteed income for life.

“There’s no perfect formula for retirement income planning — every individual has different values and needs,” says Tina Di Vito, head, BMO Retirement Institute.

“Future retirees should make an honest assessment of what they need and value most, as well as what they are prepared to give up. It’s important to remain flexible and be prepared to make adjustments to your plan if needed.”

The report was based on a survey conducted by Leger Marketing using its online panel LegerWeb between Nov. 24 and Dec. 1, 2010. The survey polled 1,127 Canadians who are 55 years and older (604 of which are retired and 523 of which are planning to retire in the next five years).

IE