Canada is one of the countries in which the greatest number of retirees have to make do with a reduced income at retirement (77% vs an international average of 68%), according to the 2007-2008 AXA Retirement Scope, an international survey that aims to explore and understand the attitudes of the population regarding retirement.

However, the survey found that for about half of Canadians, quality of life remains the same after retirement and even improves for 36% of them. This perception of improved quality of life is at least twice more frequent in retirees who had a high income during their active years.

“It is probable that a reduction in certain expenditures related to working life and the possibility of using one’s time as one wishes explain such favourable perceptions of quality of life after retirement and compensate for the loss of income,” said Robert Landry, executive vice president, life insurance and financial services with AXA Assurances.

The survey also provides interesting data regarding intentions — and reality — in preparing for retirement. Canada is one of the countries in which awareness that retirement requires preparation is the strongest and for which such preparation is made the earliest.

A high majority of Canadian active workers (74%) declare that they have already started to prepare for retirement (54% for the international average). Current retirees say they started saving at about age 37, motivated by personal reasons, such as age or family responsibilities.

“The new reality seems to be that today, people start preparing for retirement at the age of 30, very often prompted by the advice of professionals or enticed by tax benefits,” says Landry. “Life insurance is definitely part of the emerging means people use to plan for retirement.”

This was the case for 53% of Canadians already retired — and those numbers are expected to increase. More than 67% of Canadian workers have chosen this mean to prepare their retirement, including 80% of Quebecers.

Meanwhile, a majority of Canadian retirees (66%) feel that their income is sufficient, which places the country at third place in an international comparison, behind the U.S. and Switzerland. Currently, this income seems to be 20% higher than the household’s basic expenses. Considerable inequalities still remain for women who report a retirement income of $1,816 against $2,374 for the Canadian average.

So, will the picture be as rosy for the next generations of retirees? People aged 45 and over remain relatively optimistic: only 23% fear that their income will not be sufficient. This number climbs to 51% for people 35-44.

However, it is difficult to know whether this concern is based on a precise assessment of future retirement income. “In 2007, only four workers out of 10 could evaluate the income they would dispose of at retirement,” said Landry. Those able to project their retirement income are more often 45 and over and are mainly among the well-to-do.

The great majority of the Canadian population feels that the government pension plan has problems without, however, considering it is actually in a state of crisis. Taking a closer look, this confidence is not shared equally by all; 32% of Quebecers consider that the public plan has serious problems, but only 16% of Canadians do.

In Quebec, the social role of the state is more valued, and Quebec is more severely affected by population aging. In the Canadian active population, people age 35-44 are also more likely to believe that the system has serious problems because they are anticipating that it will certainly be the case when they reach retirement age.

The survey, whose sample is made up of more than 18,000 actives and retirees, was carried out in 26 countries during the fall of 2007 by a consortium of research firms led by the GFK Group and represented by CROP in
Canada.

Analyzed countries include Australia, Belgium, Britain, Canada, China, France, Germany, Hong Kong, Hungary, India, Indonesia, Italy, Japan, Malaysia, Morocco, New Zealand, the Netherlands, Philippines, Poland, Portugal, Singapore, Slovakia, Spain, Switzerland, Thailand and the U.S.