When it comes to Canadians’ concerns about retirement, it’s all about income: Russell Financial Health Index

Having a reliable source of income as well as sufficient income to cover essentials are key

Toronto, Aug. 2, 2011 – Ongoing market volatility and global unrest continue to leave Canadians feeling unsettled about retirement, according to the most recent results of the Russell Financial Health Index. In fact, Q2 results show a strong decline in financial health, to the lowest level since the inception of the on-line tool in late 2008.

The Russell Financial Health Index — an online calculator that gauges the overall financial health of Canadian investors — decreased to 44.18, down roughly four full points from the 48.00 range of the last three quarters.

In the second quarter of this year, two factors stood out as key concerns for Canadians about retirement, and had a noteworthy increase over last quarter:

  • Having a reliable source of income; and,
  • Having sufficient income to cover essentials

“While the reality is that we continue to see strengthening fundamentals in our economy, it’s not surprising that Canadians continue to feel uneasy, given the recent crush of unsettling news – from governments on the brink of bankruptcy to the fear of inflation,” said Keith Pangretitsch, Director of National Sales at Russell Investments Canada. “Although it’s important to keep an eye on both the broad economy as well as key indicators in the market, it’s even more important for Canadians to avoid becoming distracted by short-term market moves and big news stories, and focus on the fact that a broad diversification along with the appropriate asset allocation for their situation is the best defence against these macro-shocks.”

To a lesser extent, three other factors also contributed to the decline of the Russell Financial Health Index this quarter:

  • Leaving assets/inheritance to beneficiaries
  • Maximizing tax efficiency of investments
  • Having reliable, trustworthy advice

About the Russell Financial Health Index

The Russell Financial Health Index gathers its data from a confidential web survey, which takes approximately five minutes to complete. Based on a user’s answers, a Financial Health Score is assigned, which can be measured against the scores of other Canadian investors who have used the tool.

Each score is a result of analyzing variables that include physical health, personal finances, unexpected events and financial planning. Respondents are also asked questions related to how prepared they feel to ride out changes in their long term investment performance before and during retirement.

Findings from the Index will be used to assess and report analysis, on a quarterly basis, about how Canadians perceive their financial health, as they deal with different economic environments and changes in their lives.

About Russell Investments

Founded in 1936, Russell Investments is a global financial services firm that serves institutional investors, financial advisers and individuals in more than 40 countries. The firm has C$156.5 billion in assets under management (as of 03/31/11) in its mutual funds, retirement products, and institutional funds.

Russell Canada was recently named the #1 fastest growing money manager in Benefits Canada’s 2010 Top 40 Money Managers Report. For more information about how Russell helps to improve financial security for people, visit us at www.russell.com/ca.

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