Middle-aged Canadians don’t expect to have to rewrite their retirement plans due to the government’s proposal to push back Old Age Security eligibility to age 67, according to CIBC research.

CIBC surveys conducted by Harris/Decima in September 2011 show that many Canadians aged 45 to 54 – the first age group to be affected by the proposed OAS changes – were already planning on working past age 65.

While the average target retirement age for these Canadians is 63, more than two-thirds plan to stay engaged in the workforce after they retire, including taking on part time work, or doing some occasional consulting. This suggests these Canadians were already planning to supplement their income to some extent, and stay active in the workforce.

A quarter of those surveyed said they expect government payments will be a key source of income in retirement. However, 30% said they plan to rely primarily on their own savings, and 25% said private pensions would be their primary source of income.

“Most Canadians aged 45 to 54 are not likely to require major alterations to their retirement plan based on the recently announced changes to OAS,” said Jamie Golombek, managing director, tax and estate planning, CIBC.

The results show, however, that debt is a concern for Canadians in this age group. A quarter of respondents said they expect to carry some debt into retirement. One in six said they would still have a mortgage.

“For those who expect to carry debt into retirement, it is another reason to revisit their savings and debt management plans with an advisor in these critical years before retirement,” said Golombek. “Good debt management is particularly important, as repaying debt in retirement creates a drag on your discretionary income.”

For Canadians who were planning to retire at age 65, the changes to OAS payments must be factored into retirement planning. With the potential for a reduced monthly income, clients will need to carefully consider how their finances will look in the early years of their retirement and whether debt repayment would now have a greater impact on monthly retirement income.

“Fortunately, there is ample time for Canadians to make adjustments today as part of their retirement planning and to make progress on debt repayment,” said Golombek. “With a number of years on their side, small adjustments now can lead to meaningful improvements in both savings and debt.”