A vast majority of non-retired Canadians, at 88 per cent, are expressing concerns about paying for expenses while in retirement, according to a survey by Franklin Templeton Investments Corp. in Toronto.
This nervousness seems to be justified as 39 per cent of Canadians who have been retired for at least 11 years say their overall expenses have increased since retirement.
Even those who do save enough to retire at the age of 65 may find it difficult to gauge how expenses will rise over decades, especially when considering health care expenses and inflation, says Philip Bensen, senior vice president for Franklin Templeton Investments.
The survey also found that thinking about funding retirement is causing stress and anxiety for 68 per cent of Canadians.
Stress and anxiety levels are highest for those between the ages of 35 and 54 age, with roughly three-quarters of non-retired Canadians pre-retirees experiencing stress and anxiety when thinking about retirement savings and investments. While these levels certainly decrease as people head into retirement, 57 per cent of all retirees still experience stress and anxiety. This is most likely due to being fearful of or surprised by unexpected major expenses like health care, according to Franklin Templeton Investments.
“In [people’s] 30s, 40s and 50s, the day-to-day expenses of life, such as paying for a house, a car and children, often make it challenging to set aside enough for retirement,” said Bensen. “The idea of catching up can be stressful and anxiety inducing, stopping people from taking even simple steps.”
What can help is having an advisor. The survey found 92 per cent of Canadians who work with an advisor are more likely to be saving for retirement as opposed to 43 per cent of Canadians who have never used an advisor’s services.
And 52 per cent of those who currently work with an advisor are likely to have a written retirement income plan while 22 per cent of those who have worked with an advisor in the past but do not currently use an advisor’s services are likely to have a documented plan.
“Taking proactive measures is the best way to ease retirement concerns and bridge the gap between worries, expectations and reality,” says Michael Doshier, head of retirement marketing for Franklin Templeton Investments. “Getting advice and having a written plan can ease concerns and put [people] on the path to a successful retirement.”
The survey also asked retired Canadians and Americans for their financial advice. More than three-quarters recommend, “saving early, saving often and saving consistently.”
This poll was conducted online, using a sample of 6,023 adult individuals throughout Canada, the U.S. and the UK ORC International’s Online Caravan Omnibus Surveys administered the survey between Jan. 28 and 22.