In the past, people were able to rely on pensions, personal investments, and wealth assets to fund their retirement. But a survey of Canadian retirees and pre-retirees suggests that those tributaries to the retirement-income stream are no longer enough on their own.
In its latest retirement survey, which was conducted earlier this year, Fidelity Investments Canada polled almost 2,000 Canadians who were nearly or already in retirement. Among pre-retirees, 58% said they were putting off retirement because of they haven’t saved enough; a quarter of those with savings concerns said they were reducing their retirement saving to meet other expenses.
When asked about the different sources of income they plan to or currently rely on, nearly 90% of both retirees and pre-retirees cited government pension plans. Registered savings plans were another popular answer, which was identified by over 50% of both groups.
Pre-retirees and retirees differed greatly when it came to employment income’s role in funding retirement. Less than 20% of retirees said they rely on it, while over 40% of retirees said they intend to rely on it. The disparity was echoed in another question wherein 66% of pre-retirees said they believed they’ll work in retirement, as opposed to 22% of retirees who said they were working.
The top reasons for working in retirement cited by retirees were to stay mentally/physically active (60%), for financial reasons (49%), and to have a sense of purpose (40%). Among those with financial reasons, 62% said they wanted to do more of what they like to do in retirement, 44% needed the money to support themselves or their spouse, 16% wanted the added security of having employment income, and 8% said they needed to help support others in the household.
Aside from employment income, pre-retirees said they expect to rely more on home equity, defined-contribution plans, and inheritance for retirement income than retirees.
The generational differences among gig-economy workers
How the gig economy is becoming the new retirement plan
More market talk: