Most Canadians are failing to keep track of their spending habits in retirement, RBC’s RRSP Poll has revealed.

According to poll of 1,272 Canadians, conducted in October, 76% of retired Canadians are unaware of how much money they spent in their first year of retirement. Of those who are aware, 46% say it was more than expected, 12% say it was less and 42% didn’t have any expectations.

“Before retiring it’s important to be aware of how much money you think you’ll spend once you’ve retired,” says Lee Anne Davies, head of advanced retirement strategies at RBC. “Take the time to get an idea of what your day-to-day expenses are. This way, you’ll also have more time to make adjustments in your investment strategy — to ensure that your nest-egg can provide the retirement lifestyle you’ve been planning for.”

The study found that 39% of retired Canadians encountered costs they did not anticipate in retirement. Of those, almost half involved unanticipated home repairs or maintenance costs, 42% experienced unplanned healthcare costs and 36% had unintended vehicle repair costs.

When retired Canadians were asked about spending in the first three years of retirement, three-quarters say they made large purchases. These included trips, car purchases and home improvements.

Day-to-day living expenses comprise the majority of annual spending for retirees, at 58%, according to the poll. Health care was second highest at 10%, treating themselves was 9%, supporting their family was 8% and treating their family was also 8%.

In contrast, pre-retirees expect 47% of their annual spending in retirement to be allocated towards day-to-day living expenses, 12% for health care, 14% for treating themselves, 10% for supporting their family and 10% for treating their family.

IE