Canadian retirees are finding their post-work life to be a positive experience with many declaring they have saved enough and are successfully living on reduced funds, according to a study by Toronto-based Sun Life Financial Inc.
Approximately half (49%) of the respondents stated they saved enough for retirement, while 33% say they did not and 19% are unsure of whether they have saved enough, states the firm’s Retirement Now report, which was released on Wednesday.
Canadian retirees with financial advisors are even more satisfied with their retirement savings, with 62% saying they saved enough while 38% of respondents without an advisor felt the same.
Canadian retirees are, on average, living on 62% of the income they had prior to retirement, which falls within the range of income replacement ratios recommended by financial advisors and other personal finance experts, according to the report.
“This is the first time we’ve measured what percentage of pre-retirement income retirees are living on,” says Kevin Dougherty, president, Sun Life Financial Canada, through a statement. “Life in retirement is more sustainable than you might think. Despite current economic conditions, Canadian retirees are doing quite well living on just over 60% of the income they had when they were working. And this average doesn’t change much when comparing men with women or taking marital status into account.”
Workplace pension or retirement savings plans and government plans are playing a substantial role in respondents’ retirement income. Those two sources each make up 38% of the average retirement income while personal savings and investments play a smaller role with 15%. Other sources of income include inheritance (2%), home equity (2%) and “other” (6%).
Retirees were also asked whether they would have money to pass on to heirs. Almost half (46%) say it is very likely they will leave an inheritance to the next generation while 31% say it is somewhat likely, 10% believe it is very unlikely, 7% declare it to be somewhat unlikely and 6% do not know.
Four-fifths (81%) of respondents say they have a will and 51% of those with a will say they have discussed its terms with all of their heirs. However, 27% have only discussed the terms with some of their heirs, while 22% have not had the conversation with any of the heirs.
This is Sun Life’s first Retirement Now report. Ipsos Reid conducted the research for the report through an online panel between Dec. 15 and Dec. 23, 2015. A total of 2,006 retired Canadians and 2,004 working Canadians were surveyed for the report.