A bleak picture is painted by the findings of the second annual survey about 'growing into retirement,' commissioned by the Royal Bank of Canada (RBC). Most retirees' outlook has worsened in just one year, and the so-called 'golden years' are beginning to look tarnished. Just one year ago, 39 per cent of Canadians expected to still have debt in retirement; more than half of those questioned now (54 per cent) think that they will not have paid off everything.
Canadians in general are struggling with record levels of debt, and retirees are susceptible to the same challenges. The most widespread response is moving to a rented property or downsizing. The second choice is to make a point of spending less, while a third way is maintaining 'status quo' by selling off assets to meet any shortfall.
The survey took place in February and March amongst a sample of people over 50 having at least $100,000 in assets. Other polls have also shown a growing lack of preparedness for retirement. It is clear that with financial pressures including luxury homes, extensive travel, and perhaps multiple marriages, the average person may not be able to afford the retirement that they had previously looked forward to.
Other surveys have found that one-third of respondents don't even think they will be able to meet their regular living expenses when they retire, and the average age that Canadians expect to retire has increased by three years, to 68, since last year's surveys. One way would-be retirees are coping with this situation is to stay in the workforce longer.
There are some very positive aspects of continuing working as you become older. Older workers are more experienced, and being on hand in the workplace can provide guidance and mentoring to younger employees. Applying themselves to work keeps them more alert with the added benefit of extra income. Studies have shown that those opting for full retirement and not working are more liable to suffer bad health, with more chronic conditions and less physical activity.
It appears that a truly comfortable retirement is becoming more inaccessible to many Canadians. While many dream of what they may do upon retirement, for some the dream must be deferred, if not abandoned. It pays to start planning for retirement early.