Two-fifths of pre-retiree Canadians would not be able to cover their cost of living beyond five years if they had to retire unexpectedly tomorrow while 16% of working Canadians between the ages of 45 and 64 would not be able to afford their lifestyle past one year, suggest the results of a poll conducted by Winnipeg-based Investors Group Inc. that were released on Thursday.

“There are a variety of reasons someone may experience unexpected retirement – from personal illness to caring for a sick loved one,” says Tim Cottee, vice president of retiree planning for Investors Group.

Thus, Canadians have to be ready to readjust their retirement plans to compensate for the fewer number of employment years that they would have contributed to retirement income, he adds.

When survey respondents were asked how they would manage the cost of living if forced to retire suddenly, the most popular response was that they would turn to sources already earmarked for retirement.

Specifically, 83% of respondents said they would look to the Canada Pension Plan or old-age security as their primary or secondary source of retirement income. This was followed by RRIFs and registered retirement income funds, at 73%, and their company pension plan, at56%.

Other sources of income include investments and employment earnings, with 46% and 42% saying they would rely on these, respectively. Financial support from others would play a significant part for 17% of respondents.

The survey also found that although life insurance is a popular choice for Canadians, only 22% of pre-retirees have critical illness and long-term care insurance, which is important to help cover medical costs and loss of income that can affect funding retirement.

“Insurance is not a sexy investment,” Cottee says. “The decision can be emotional and the idea of it brings about visions that conflict with the future we see for ourselves.”

Still, insurance can help Canadians live out the retirement they dreamed of even if an unexpected illness occurs, he adds.

Among the working Canadians who feel prepared for retirement, 55% work with a financial advisor while 45% don’t.