Sun Life Financial survey finds four in ten Canadians don’t know how much they need for retirement
TORONTO, Feb. 5 2008 – A recent survey conducted by Sun Life Financial showed an equal amount of Canadians believe they need $25,000 or less for retirement as those who say they’ll need between $1 and $5 million. The wide range in estimates of one’s retirement savings is backed up by the fact that 43 per cent of Canadians said they didn’t know how much they needed to save for retirement.
While the majority of working Canadians (52 per cent) expect to be retired for at least 20 years, the survey revealed that nearly nine million working Canadians don’t know how many years they’ll need their retirement savings to last.
Conducted by Omnitel, a division of Maritz Research, the survey also revealed a ten-year gap between the age at which Canadians want to retire (between 55 and 60), and the age at which they expect to retire (between 65 and 70).
“These results are sobering, but synching up your ‘wants’ with your ‘expectations’ when it comes to retirement is achievable for most people,” said Kevin Strain, Senior Vice President, Individual Insurance and Investments, Sun Life Financial Canada. “Especially now, when market volatility and retirement savings are top of mind, it’s important to take that next step and work with an expert to develop a financial plan that will help you reach your retirement goals,” he added.
According to the survey, Canadians realize they need to save, because three-quarters of employed Canadians contribute to some type of registered retirement savings plan. However, beyond that, respondents didn’t know how much they’d need to save or for how long. When asked about their most pressing retirement concerns, not saving enough money to retire was top of the list (31 per cent), followed closely by a worry that they would outlive their savings (28 per cent). Running out of retirement money is becoming one of the most significant concerns that individuals have expressed about retirement.
“Retirement is so top of mind right now, especially because of the large numbers of baby boomers retiring or set to retire in the coming years, making it even more important to look at the many factors that go into retirement planning,” said Strain. “It takes some time and thought to plan for the possibility of living to age 90 or beyond, or how much you might need to save for significant risks like health care costs, but they are important factors which must be considered.”
Overall, the results suggest that Canadians expect to retire while they are young enough to enjoy their retirement years, but haven’t necessarily taken the steps to work with a financial advisor to build their savings and create a financial plan.
Saving for retirement can be complicated – there are numerous investments, savings plans and financial products that are available. A financial advisor can help:
- Assess your current situation by examining your finances
- Set achievable financial goals
- Develop a realistic plan to meet those goals and put your plan into action
- Monitor your progress to keep you on track
- Update your plan to grow with your changing needs and goals
“At the same time, there are products available today that protect against outliving your assets. These products work similar to a defined benefit pension plan offering a guaranteed income stream for either a specific period of time or for life. A financial advisor can help match your need with the right product solution,” added Strain.
The national telephone survey was conducted between January 8 and January 19, 2008. A total of 1,530 working Canadians (working full time, part time or self employed) were interviewed. Survey findings are accurate, plus or minus 2.5 per cent, 19 times out of 20. More information about the survey can be found on www.sunlife.ca/retirement.
About Sun Life Financial
Serving one in every five Canadians, Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of September 30, 2007, the Sun Life Financial group of companies had total assets under management of $427 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF.