Is there some emerging optimism about retirement?
Over my professional career, I have met many Canadians that have a bad case of retirement anxiety. Maybe it’s because saving money for retirement has become harder and harder and is reflected in the low savings rate which has been under 5% for almost 20 years. Maybe it has something to do with our infatuation with spending; so much so that debt levels continue to surpass record levels year after year.
Related article: Retirement Anxiety
The Sun Life Unretirement Index
Sun Life has been doing some great research on retirement in Canada since 2008 through their Unretirement index. The goal of the Unretirement Index is not about encouraging Canadians to save more or invest better. Instead, it’s about increasing awareness of the factors that shape attitudes and expectations towards all retirement issues.
Related article: All the research from the Sun Life Unretirement Index
From 2008 to 2011, the study suggested that Canadians were planning to work longer and longer. The polls asked a simple question, “at what age do you think you will finally stop working and be fully retired?”
The results went from age 65 in 2008 to age 69 in 2011. In 2011, the Sun Life Unretirement Index, also told us that 62% of Canadians would work past 65 because they have to and only 38% because they want to.
Is there some emerging optimism?
According to the latest research by Sun Life Financial, there may be some optimism brewing in Canada. Kevin Press, Vice President of Market Insights who leads the team for this research says, “On average Canadians say they expect to retire at 66 which is a full year earlier than last year’s age 67 result and the lowest figure we’ve seen in four years.”
It may be premature to call this a trend but there are many signs showing some emerging optimism about retirement.
- 35% of Canadians still plan to retire before the age of 65
- 38% of Canadians are satisfied with their retirement savings
- 80% are confident they will have enough in retirement to take care of basic living expenses
- 71% are confident they will be able to take care of medical expenses in retirement
Although all this data is up from the results from the previous year, the year-over-year increases are small. But together, they appear to indicate a reversal in the pessimism that has been so much a part of this study since 2010.
My five cents
Retirement is definitely on the minds of Canadians especially all the baby boomers that are hitting this crucial transition in life. For me, I see optimism and confidence shift as the markets shift. When markets go through correction and bear markets, confidence lags. After two and half years of strong market returns, it is expected that Canadians may feel more optimistic about their retirement. Although, markets play a role in optimism and pessimism, the problem is that you cannot control or predict markets.
Retirement anxiety comes from the unknown and not being able to see the future. For true optimism, Canadians need to take control of their finances by saving more, getting out of debt and developing concrete plans for retirement.