News reports on the rising cost of medical care, combined with reduced levels of provincial support have many Canadians putting aside thoughts of early retirement, according to a new survey by Desjardins Financial Security (DFS).

Monique Tremblay, senior vp, savings and segregated funds, DFS, says previous surveys, “indicate that people thought they could retire early and be healthy enough to work part-time.”

However, because of rising concerns about the affordability of health care, “Canadians now realize they need to save more money to pay for these types of expenses, before they retire. Fear of ill health may keep people in the workforce longer than everyone’s previous projections,” Tremblay says.

When asked about an illness or accident requiring healthcare services for more than three months, 72% of respondents believe the healthcare services provided by their provincial governments would only partially cover medical and hospital costs.

The survey results also show that more than 60% of Canadians realize they must increase their retirement savings in case of health problems during their retirement.

The survey found that 69% of Canadians who believe their government would only cover partial medical and hospital costs would use their personal savings to fund any shortfall.

Group or private insurance benefits would be used by those with access to them, while 40% of respondents would go to their family for assistance.

As for retirement savings, the survey found that 51% of Canadians have an RRSP. Although 36% have RRSP’s of $50,000 or more, 20% have less than $5,000 invested.

The survey also found that 32% of Canadians have $5,000 or less in savings and investments outside of their RRSP.

The 2004 retirement telephone survey was carried out by SOM from Aug. 13 to Sept. 14, 2004. Overall, 1671 interviews were conducted with a representative sample of Canadian adults. The sampling plan provides proportion estimates with a maximum margin of error of 2.5% at a 95% confidence level.

Desjardins Financial Security http://www.desjardinsfinancialsecurity.com/press