Majority of Canadians also say they want guaranteed retirement income to protect their savings
TORONTO, Feb. 23 2009 – Canadian workers are feeling more confident than their American neighbours about the economy, personal finances, health, employer and government benefits according to findings recently released from Sun Life Financial’s Canadian and American Unretirement(TM) Index surveys.
However, the picture isn’t entirely rosy for workers north of the border. Almost one-third of Canadians are not at all satisfied with how much they are saving for retirement, and one in 11 say they actually dipped into their retirement savings in recent months due to the economy – that’s on par with the number of Americans who have withdrawn money from their retirement nest-eggs.
“We asked Canadian and American workers about the key drivers impacting their retirement and in every category, Canadians had a more positive outlook,” said Dean Connor, President, Sun Life Financial Canada. “However, the fact that so many Canadians had to withdraw money from their retirement savings so soon into this downturn indicates how challenging it is for some, and signals a concern for the future.”
Canadians are also more confident than Americans when it comes to being able to pay for health care costs in retirement, though neither group is fully confident. According to the surveys, 37 per cent of Canadians feel very confident that they would be able to handle medical expenses at the age they retire, compared to 23 per cent of Americans. Less than half of Canadians polled have checked to see what health or dental benefits are available to them once they retire.
Along with preparing for health care costs in retirement, the recent economic downturn may have Canadians rethinking their retirement investments with three in four respondents indicating they want part of their retirement income guaranteed so their income is protected. Interestingly, the percentage of people who wanted guaranteed income in retirement was above 70 per cent across all age groups surveyed.
“Today’s economic climate has Canadians of all ages looking for investment solutions that will protect their hard-earned retirement savings from worries of market volatility, inflation and outliving their assets,” said Connor. “There are products in the marketplace, like SunWise Elite Plus, that address all of these concerns and include a guaranteed minimum withdrawal benefit that provides guaranteed, sustainable income during retirement along with the potential for growth. A financial advisor can take into account all aspects of retirement and help develop a plan that works for each individual situation.”
According to the survey, respondents with financial advisors were consistently more optimistic about retirement planning than those without. Canadians who work with a financial advisor not only felt more confident when it comes to personal finances, but around all aspects that influence retirement including health, the economy and employer and government benefits.
Measuring Canadians’ confidence about retirement
The Sun Life Financial Canadian Unretirement(TM) Index measures the confidence that Canadian workers have towards issues that influence retirement. The first of multiple studies yielded an overall index score of 50 on a scale of 0 to 100. The U.S. index was a more pessimistic score of 44. For both the Canadian and American Sun Life indices, the overall score is a composite of the performance of five issue-specific sub-indices.
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Sun Life Financial Canadian Sun Life Financial American
Unretirement(TM) Index Unretirement(SM) Index
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Macroeconomic Index 40 33
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Personal Finance Index 46 41
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Personal Health Index 70 67
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Government Benefits Index 45 40
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Employer Benefits Index 47 38
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Overall Unretirement Index 50 44
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For more information about Sun Life Financial’s Canadian Unretirement(TM) Index, visit www.sunlife.ca/unretirementindex.
For more information about Sun Life Financial’s American Unretirement(SM) Index, visit www.sunlife-usa.com/unretirementindex.
Canadian Unretirement(TM) Index Methodology
The Canadian study was conducted by Fleishman Hillard from December 8 to 23, 2008. Telephone interviews were conducted by Interviewing Service of America using a random-digit dial (RDD) sampling method. Quotas and weights were applied to gather a sample of 1,226 people working either full- or part-time, which is representative of the Canadian working population between the ages of 30 and 65. The sample is also representative in terms of gender and region census break. Analysis and construction of indices involved the application of factor analysis. Final indices are based on summated averages across the attributes which make up an index.
Age groups were divided by workers in their 30s, 40s, 50s, and 60+ and by three ranges of total assets, not including the net worth of the person’s place of residence (less than $100K, between $100K and $500K, and greater than $500K). This sample has a margin of error of 2.9 per cent at the 95 per cent confidence level.
American Unretirement(SM) Index Methodology
This edition of the study was conducted between December 3 and 14, 2008. Telephone interviews were conducted by Interviewing Service of America using a random-digit dial (RDD) sampling method. Quotas and weights were applied to gather a sample of 1,200 people working either full- or part-time, which was representative of the U.S. working population between the ages of 30 and 66. The sample was also representative in terms of gender and four-region census break. Analysis and construction of indices involved the application of factor analysis. Final indices are based on summated averages across the attributes which make up an index.
Age groups were divided by workers in their 30s, 40s, 50s, and 60+ and by three ranges of total assets, not including the net worth of the person’s place of residence (less than U.S. $100K, between U.S. $100K and U.S. $500K, and greater than U.S. $500K). This sample has a margin of error of 2.8 per cent at the 95 per cent confidence interval.
About Sun Life Financial
Sun Life Financial is a leading international financial services organization providing a diverse range of protection, 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 December 31, 2008, the Sun Life Financial group of companies had total assets under management of CDN$381 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF. For more information on Sun Life Financial, visit www.sunlife.ca.
