According to the 2008 AXA Retirement Scope, an international study carried out in 26 different countries, Canada is by far the country with the most voluntary early retirements – almost 3/4 of the retirements. 58% plan to do something after retiring that gives them an income – so retirement from work but not retired from wanting to do something else.
Idea of Retirement
73% of Canadians that are NOT retired perceive retirement as a period of freedom. Only 19% associated retirement with negative images such as fear of aging or financial difficulties. As would be expected, those with a lower income were more negative about retirement than those with a higher income.
Traveling during retirement
photo credit: Indiana Stan
A large majority of Canadian actives (61%) hope that retirement will allow them to travel. With gas prices going north, will walking from one place to another be considered travel?
Will life be better for your children?
Only 30% of Canadian retirees believe that life will be better for their children. This is despite the fact that Canada is one of the countries where retirees are most satisfied with their lot, compared with that of the previous generation.
Sense of responsibility – looking after your parents
As Canadians, we don’t expect that our children will support us materially or financially when we retire since we highly value autonomy and individual responsibilities. 90% of retirees are much more concerned about whether the kids will visit regularly than getting support from them! 45% of those that are not retired think they are responsible for providing their retired parents with material or financial support. Someone is in for a surprise – pleasant or not!
Will the nest egg be sufficient?
Canada is one of the countries where a good proportion of actives (60%) believe that their retirement income will be sufficient. Two-thirds of the retirees feel that their current income level is enough.
Will the quality of life improve upon retirement?
When assessing whether their quality of life will improve, 28% of Canadian actives and 36% of retirees agreed.
How much do people set aside for retirement and where do they invest?
The typical amount saved by Canadians for retirement is $482/month. To finance their retirement, both actives and retirees, tend to prefer risk-free financial products even though their return is lower. Is this figure consistent with what you thought or with what you currently set aside? I guess if you put $6000 into an RRSP, it equates to about this amount.
Who is responsible for ensuring your financial needs are met upon retirement?
In Canada, a large majority (85%) feel that the individual is responsible first, then the government (77%) and finally the employer (75%). If you’re in Quebec, a whopping 89% believe that the employer should play the main role!
Recipe for a happy retirement
What is the recipe for a happy retirement? The international study reveals that overall, the happiest retirees:
- Feel that their health is better than that of the other retirees.
- Prepared for their retirement earlier.
- Have sufficient income to take advantage of retirement.
What should do you now?
- prepare for retirement early – there’s no time like the present
- think about where you will live and how accessible that will be for your children
- discuss retirement expectations with your children
- enlist the support of a financial planner
- keep investing
- if you are years from retirement, consider upping the amount that you have in higher return investments
- set aside some money for travel
- focus on your health (again, no time like the present)
Any other ideas from those that are retired or actives (planning to retire)?