Canadians plan on working longer and retiring later, according to a new survey.
According to Sun Life Financial’s 2012 Canadian Unretirement Index, conducted by Ipsos Reid, only 30 per cent of Canadians expect to be fully retired at age 66. The survey also finds more Canadians plan to phase in retirement by working part-time or freelance.
The index found a growing trend of 48 per cent of Canadians planning to phase in their retirement by working part-time or freelance, as concerns about having enough savings grow in today’s economic climate.
“Canadian retirement expectations are changing with many planning to work longer and almost half of Canadians looking to phase in their retirement,” said Kevin Dougherty, President, Sun Life Financial Canada. “These results are not surprising given the current economic volatility, increasing consumer debt loads, rising healthcare costs, longer life expectancy and lack of planning. We’re also finding that some Canadians believe they’ll have to work longer to be able to pay for basic living expenses.”
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Among Canadians who expect to work past the traditional retirement age of 65, 61 per cent say they are working because they need to and only 39 per cent say it is because they want to. The Index also found that for Canadians planning to phase in their retirement:
Forty-three per cent expect to start the process between the ages of 60 and 65, working either part-time or freelance before they stop working completely
Twenty-one per cent plan to start between the ages of 50 and 59
Eight per cent expect to start between the ages of 66 and 70
“Interest in phased retirement has been growing over the past few years,” said Ian Markham, Canadian Retirement Innovation Leader at Towers Watson. “Baby boomers are looking at it as a way to prolong their careers, pay off some debts and make a smooth transition into retirement. Having additional income during this transition creates an additional financial safety net for Canadians – which we’re seeing as increasingly important in today’s economy.”
The current economic state is weighing heavily on the minds of Canadians with nearly half (47 per cent) stating they are worried about debt in retirement. Consumer debt is also impacting retirement planning; 44 per cent of Canadians say that paying down debt is their number one financial priority, which ranks significantly higher than saving for retirement (20 per cent).