Canada’s baby boomers are rapidly approaching retirement, but aren’t financially ready, according to the recent TD Waterhouse Boomer Happiness Index.

The index polled boomers (ages 45-64) to determine their emotional and financial state heading into retirement. One of the key findings was that while 87% of boomers say that in general, they are happy, this level of happiness changes when they are asked about retirement. Sixty-seven per cent say they are worried they won’t have enough money and only 15% feel very well-prepared, suggesting that this generation, who also responded that they believe boomers will “redefine retirement,” may be going about it the wrong way.

Boomers’ money concerns appear warranted since only 34% of boomers have a plan in place for retirement. The index also found a correlation between having a financial plan and happiness levels: when thinking about their current or future retirement, boomers who have a financial plan are more likely to feel happy (55% versus 31%) or relieved (37% versus 22%) than those without.

“Most Canadians recognize the importance of planning ahead to ensure that they are financially ready when they stop working. Yet, it’s concerning that even as boomers approach retirement age, many still haven’t established a comprehensive plan for achieving a financially-secure retirement,” says Patricia Lovett-Reid, senior vice president, TD Waterhouse.

Three ways to fund retirement

The top three ways planned to fund retirement are: RRSPs (61%), Old Age Security and the Canada Pension Plan (60%) and company pensions (47%). Thirty-nine per cent of boomers plan to fund their retirement by continuing to work. Alarmingly almost one-third (32%) stated that they are relying on winning the lottery. While this statement may be tongue-in-cheek, according to the survey results this group is less likely to have a financial plan and more likely to be anxious about retirement and feel behind in their savings.

When thinking about retirement, the top fears voiced by boomers were: keeping healthy and active (74%), maintaining their current standard of living (67%) and running out of money in retirement (67%). While these retirement anxieties aren’t all financial in nature, they may be alleviated with the help of financial advisors who can you develop a plan that takes into consideration personal circumstances and goals, as well as help offset risks.

The TD Waterhouse Boomer Happiness Index polled boomers (age 45-64) and pre-boomers (age 65-74) through a custom, online survey. The survey was conducted by Environics Research from December 2-7, 2010, and polled 1,000 Canadians.

IE