Older Canadians are supporting family, tapping retirement funds

RBC Insurance survey shows that the pandemic has changed priorities for many older Canadians

Older Canadians are supporting family, tapping retirement funds
Steve Randall

With the pandemic having an outsized impact on younger Canadians’ finances, their older family members are stepping up to help.

But for this older cohort, it means tapping retirement funds and re-evaluating their savings, investments, and spending according to research from RBC Insurance.

Most older Canadians (aged 55-75 years) said that their finances have not been negatively impacted by the COVID-19 pandemic and are therefore in a stronger position to support others including helping family/friends in need (39%), increasing commitments to a family legacy (31%) and to charitable giving (28%).

For a minority of around one in five older Canadians, things have not been so good financially and they have tapped retirement savings to pay for everyday expenses. Among households with income below $40K, three in ten are doing so.

One third of respondents said the pandemic has left them feeling less confident in their retirement funds enabling the lifestyle they want. A similar share said they are not on track with their financial goals.

Saving more, for now

In line with some other recent polls, the RBC Insurance survey reveals that many Canadians have been able to save more during the pandemic.

Around half of older Canadians polled said this was the case, rising to 59% among those using a financial planner.

However, their intentions for how to use the money they have saved on vacations and entertainment is unlikely to be saved long-term or invested; future entertainment spending (55%) is the top focus for this excess cash with investing (29%) and paying down debt (18%) lower down the list.

Many are also looking to make changes to their financial portfolio, where two-in-three are interested in safer investment options that guarantees income.

The benefits of working with a financial advisor or planner is clear with 20% of older Canadians who worked with a financial planner more confident that they'll have enough money to last throughout their retirement, compared to just 11% of those who never worked with a financial planner.