February 2, 2006 Toronto, ON – On behalf of Bank of Montreal, Ipsos Reid recently surveyed financial decision-makers age 45 or over with at least $25,000 in financial assets. The survey canvases opinions from an already well-established set of Canadians, whether they are retired or anticipating retirement and illustrates a populace that is comfortably positioned for retirement and confident in their expectations.
The survey finds that over half [54%] of these Canadians have a dollar figure in mind for retirement needs and among those 66% look at funding retirement from a monthly income perspective, with $3,500/month as the average. Only a very small proportion [8%] have a lump sum in mind, with $649,500 as the average amount.
The survey also reveals that the Canadians surveyed plan to use most of their retirement income to fund their own retirement needs [81%], and 12% of their income will be used to support children or grandchildren, 2% to support their parents, and the rest of the 6% will be used to build a legacy.
These are the findings of an Ipsos Reid/BMO online survey conducted from October 21 to October 27, 2005. For the survey, a randomly selected sample of 5325 financial decision-makers age 45 or over with at least $25,000 in financial assets completed an online survey. With a sample of this size, the results are considered accurate to within +/-1.34 percentage points, 19 times out of 20, of what they would have been had the entire Canadian population of 45 years or over with at least $25,000 in financial assets been polled. These data were weighted to ensure the sample’s regional and asset composition reflects that of the actual Canadian population according to the 2001 Census data.
Over Half [54%] Of The Canadians Surveyed Have A Dollar Figure In Mind For Retirement Needs And Among Those 66% Look At Funding Retirement From a Monthly Income Perspective
The survey finds that over half [54%] of these Canadians have a dollar figure in mind for retirement needs and a majority [66%] of those who have a dollar figure in mind look at funding retirement from a monthly income perspective, with $3,500/month as the average. Almost a quarter [24%] of those who have a dollar figure consider retirement funding from annual income stream perspective, with $54,700/year as the average. Only a very small proportion [8%] has a lump sum in mind, with $649,500 as the average amount.
When comparing responses from the pre-retired group with those currently retired, 60% of the retirees had a dollar figure in mind before they retired and 46% of the pre-retirees have had a dollar figure for their future retirement needs already. A majority of the retirees [68%] look at funding retirement from a monthly income perspective, with $3,450/month as the average. 26% of the retirees consider retirement funding from annual income stream perspective, with $54,135/year as the average. Only 5% of the retirees think lump sum, with $442,303 as the average amount. Slightly less pre-retirees [64%] than retirees look at funding retirement from a monthly income perspective, with $3,525/month as the average. 20% of the pre-retirees consider retirement funding from annual income stream perspective, with $55,853/year as the average. Pre-retirees [14%] are more likely than retirees to have a lump sum in mind, with $769,266 as the average amount.
-
Quebecers are most likely to have a dollar figure in mind for retirement needs [60%, compared to 49% for British Columbia, 50% for Alberta, 51% for Atlantic Canada, 52% for Ontario, 55% for Manitoba and Saskatchewan]. Those from Atlantic Canada are most likely to think monthly [73%, compared to 70% for Ontario, 64% for British Columbia, 64% for Quebec, 62% for Manitoba and Saskatchewan and 58% for Alberta]. Those from Alberta are more likely to have a lump sum in mind [14%, compared to 12% for Manitoba and Saskatchewan, 10% for Quebec, 8% for British Columbia, 6% for Ontario and 6% for Atlantic Canada].
-
Men [56%] are more likely to have a dollar figure in mind than women [49%]. Women [72%] are more likely to think monthly than men [63%]. Men [27%] are more likely than women [17%] to think annually. Similar proportions of men [8%] and women [9%] have a lump sum in mind.
-
The likelihood of having a dollar figure for retirement needs increases with age: 45% of those 45-54, 54% of those 55-64, 60% of those 65-70 and 57% of those 70+ had or have a dollar figure in mind for retirement needs. The likelihood of thinking lump sum decreases with age and the likelihood of thinking annually increases with age, while the likelihood of thinking monthly remains stable across age groups: 16% of those 45-54, 8% of those 55-64, 5% of those 65-70 and 3% of those 70+ have a lump sum in mind; 18% of those 45-54, 22% of those 55-64, 26% of those 65-70 and 32% of those 70+ think annually; 64% of those 45-54, 68% of those 55-64, 67% of those 65-70 and 64% of those 70+ think monthly.
-
The likelihood of having a dollar figure for retirement needs also increases with asset level: 46% of <$100K, 59% of $100 – <$250K, 67% of $250 – <$500K, 74% of $500 – <$1 million and 74% of $1million+ had or have a dollar figure in mind for retirement needs. The likelihood of thinking lump sum or annually increases with asset level while the likelihood of thinking monthly decreases with asset level: 7% of <$100K, 8% of $100 – <$250K, 12% of $250 – <$500K, 17% of $500 – <$1 million and 18% of $1million+ have a lump sum in mind; 17% of <$100K, 27% of $100 – <$250K, 28% of $250 – <$500K, 33% of $500 – <$1 million and 41% of $1million+ think annually; 74% of <$100K, 63% of $100 – <$250K, 58% of $250 – <$500K, 47% of $500 – <$1 million and 36% of $1million+ think monthly.
The Canadians Surveyed Draw/Expect To Draw From Many Different Income Sources
The survey finds that the Canadians surveyed draw or expect to draw retirement income from various sources. Government pensions [89%], sheltered investments such as RRSPs and RRIFs [78%], employer pensions [72%], other non-sheltered investments [51%] and continued employment [31%] are the most commonly mentioned income sources.
The pre-retirees are more likely than the retirees to cite government pensions [91% compared to 88% for the retirees], income from sheltered investments such as RRSPs and RRIPs [88% compared to 70% for the retirees], income from other non-sheltered investments [55% compared to 48% for the retirees] and income from continued employment [42% compared to 23% for the retirees] as expected income sources in retirement. The retirees [80%] are more likely than the pre-retirees [61%] to have employer pensions.
The Canadians Surveyed Use 81% of Their Retirement Assets to Fund Their Own Retirement
The survey also reveals that these Canadians have the following plans for their retirement income:
-
Funding their own retirement: 81%
-
Supporting children or grandchildren: 12%
-
Building a legacy: 6%
-
Supporting parents: 2%
The pre-retirees plan to allocate slightly more money for their own retirement [82%] than the retirees currently do [80%]. The retirees [13%] allocate slightly more money to support their children or grandchildren than what the pre-retirees [11%] intend to do.
Ipsos Reid
Ipsos Reid is Canada’s market intelligence leader and the country’s leading provider of public opinion research. With operations in eight cities, Ipsos-Reid employs more than 300 researcher professionals and support staff in Canada. The company has the biggest network of telephone call centres in Canada, as well as the largest pre-recruited household and on-line panels. Ipsos Reid’s Canadian marketing research and public affairs practices are staffed with seasoned research consultants with extensive industry-specific backgrounds, offering the premier suite of research vehicles in Canada – including the Ipsos Trend Report, the leading source of public opinion in the country – all of which provide clients with actionable and relevant information. Ipsos Reid is an Ipsos company, a leading global survey-based market research group.
To learn more, visit: www.ipsos.ca
