Only 33% of Canadians aged 55 years old or older are willing to adjust their retirement lifestyle plans to accommodate what will likely be a longer retirement as individuals continue to live longer, according to a new report from Toronto-based Royal Bank of Canada (RBC).
Specifically, RBC’s Financial Independence Retirement Poll indicates that some Canadians could be spending up to three decades in retirement. But while 30 years in retirement could be a “gift of time” to Canadians to do what they want, when they want to, they also need to consider the importance of planning for those additional years, says Yasmin Musani, director of retirement client strategies with RBC.
Although most older Canadians are not considering adjusting their lifestyle for a longer retirement, 46% continue to wonder whether they will have enough money for retirement and a separate 46% say they are financially “somewhat short/nowhere close” to where they anticipated their retirement savings would be at this point in their lives.
Slightly more than one-quarter (26%) of the older Canadians who participated in the survey are also wondering how they can make the most of the money they have saved.
Developing “fluid” retirement plans and revisiting those plans as Canadians get closer to that stage of life will help them understand if they have enough money to support their lifestyle, says Bill Hill, a national retirement planning consultant with RBC.
Here are some key questions that you should ask clients to help them develop and adjust their retirement plans:
> Where will you want to live?
> Do you have any travel plans in mind?
> Will you be providing any assistance to younger or aging family members?
> Have you discussed your plans with people close to you and with a financial advisor?
When Canadians communicate how they want to spend their retirement, both financial services professionals and their clients will be able to decide how much funding will be required for that latter stage of life, Hill says.
RBC’s research explores some of the more popular ways Canadians plan to spend their time in retirement. More than six in 10 (62%) say they want to take more time for themselves and 45% plan on spending more time with their spouse or partner. The third most popular activity is “getting more rest” for 43% of older Canadians while “travelling” is right behind with 42%.
Ipsos conducted the online survey of 2,033 adult Canadians from Nov. 25–30, 2016 for RBC.
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