Canada has improved its retirement security, but 4 in 10 doubt they'll achieve it

The stats may give reasons to be optimistic but what if the reality doesn't match up?

Canada has improved its retirement security, but 4 in 10 doubt they'll achieve it
Steve Randall

Taken at face value, Canada ranking among the 12 best countries in the world for retirement security is something to be proud of.

It should also make retirees and those approaching retirement feel confident that the last chapter of their lives will be financially positive. However, the reality appears very different for many.

Natixis Investment Managers’ 2023 Global Retirement Index shows a rise for Canada to number 12 in the rankings (from 15 last year), roughly between top-rated Norway and the 20th place ranking for the United States.

Almost all developed countries included in the ranking improved this year – the first time in a decade that has happened – amid better economic conditions such as employment growth, wage gains, and interest rates. Canada scored highly for its labour market and interest rate environment and scored 74% overall compared to 71% last year.

However, a third of working Canadians with at least $100,000 in investable assets feel that their retirement security is being killed off by inflation and 38% now believe that achieving retirement security will take “a miracle”.

Retirement lifestyle

Recent economic conditions have proven to be a wake-up call for Canadians with 80% saying that it’s shown just how big a threat inflation is to their retirement security, devaluing their income and savings. They also face lower government contributions to their retirement income with 82% agreeing that government programs don’t consider the fact that people are living longer now.

Two thirds of working Canadians believe they will have to make tough choices in retirement such as living frugally, living somewhere cheaper, selling their home, continuing to work, or relying on family and friends to make ends meet.

While 42% of working Canadians say they accept that they are going to have to keep working for longer than anticipated, 31% are worried they won’t be able to stay employed as long as they’d like. Among those already retired, the average age they planned to retire was 65, but the average actual retirement age was 61.