Only about one-quarter of Canadians expect to retire at a traditional age, according to a new survey.
Sun Life Financial, Toronto, unveiled this finding in its 5th annual Unretirement Index. Ipsos Reid conducted the survey in November and December of 2012, polling 3,017 working Canadians from 30 to 65 years of age from.
The report shows that the number of Canadians who expect to be retired at age 66 has dropped to only 27 per cent in this year's study from 51 per cent in 2008, a decline of almost 50 per cent.
For the first time in five years of tracking retirement trends, the index finds that the number of Canadians who expect to be retired at 66 (27 per cent) is almost equal to Canadians who expect to be working full-time at 66 (26 per cent). Almost another third (32 per cent) expect to be working part-time at 66 adding, up to almost 60 per cent of Canadians who expect to work past the traditional retirement age, while about 15 per cent are not certain.
"The dream of being able to afford a full retirement at age 66 is declining among Canadians, says Sun Life Financial Canada President Kevin Dougherty. “It's being replaced by the reality that many people expect to be working beyond the traditional retirement age. The aftermath of the financial crisis of 2008 has had a lasting impact, with more Canadians expecting they will need to work longer as a result."
The survey reveals that more Canadians are expecting to work past 66 because of necessity and fear of outliving their savings:
• 63 per cent expect they will need to work past 66 compared with 37 per cent wanting to work.
• With Canadians expecting to be retired for an average of 20 years, more than a third (38 per cent) say there is a serious risk of outliving their retirement savings.
• Nearly one in three (31 per cent) of the respondents are not confident that they will have enough for medical expenses.
The survey also finds that Canadians have a gap in their thinking about retirement savings. They anticipate requiring an average income of $46,000 per year for their retirement, yet they are only aiming to have $385,687 in retirement savings (excluding their home and other property).
Only a quarter of Canadians (23 per cent) say saving for retirement is their number one priority, the report adds. Paying down debt or credit cards is the number one priority for nearly half of Canadians.
The priority placed on saving for retirement varies with age. It is a top financial priority for 37 per cent of early boomers in the 57 to 65 year age group. The number drops to 12 per cent of people in Generation X - 30 to 46 year old age group - who say it's their top financial priority.