When will you pack it in? RBC poll asks Canadians what drives their retirement decisions
Money (of course) but health care considerations are increasing in importance
TORONTO, February 2008 — According to the latest RBC RRSP poll, nearly seven in ten Canadians (69 per cent) believe that determining the amount of money needed for a comfortable retirement is the key driver in their decision about when to retire. Even though money is key for most Canadians, they are also increasingly aware of the importance of their health care and lifestyle needs when planning their retirement.
“As the RRSP contribution deadline on February 29 approaches, many Canadians are thinking about their savings and whether they will have enough money to retire comfortably,” said Lee Anne Davies, head, advanced retirement strategies, RBC. “But how do you determine how much money you will need until you have a clear picture of your retirement, taking into account things like your lifestyle, health care and family needs?”
The survey showed that health care is becoming a more important consideration. Three in five Canadians (60 per cent) think that their health care needs are also an important driver in their decision to retire, up from 54 per cent in 2006. Nearly half of respondents (49 per cent) expect to use some of their retirement savings to pay for health care costs - on average one-fifth of their retirement savings.
“As Canadians come to terms with the health impacts associated with aging, they realize that some of their retirement savings will be needed to pay for health care costs which may not be covered by government or employer programs,” said Davies.
Despite this realization, Canadians are optimistic about their retirement lifestyle. More than four in five respondents (81 per cent) believe they will have a comfortable lifestyle in retirement - but views on how much money is needed vary dramatically. According to those surveyed, retirees, on average, say they had a goal of nearly $450,000 as the amount of money required for a comfortable lifestyle. However, people who have yet to retire think they will need nearly double that amount, or almost $900,000. Among Canadians who have not yet retired, men and women have dramatically different views - men estimate that they will need more than $1,000,000 to retire comfortably, while women put the figure closer to $675,000.
“As we have also seen in our past research, people approaching retirement don’t always have a realistic view of how much money they need to retire comfortably and that men and women have substantially different perspectives,” added Davies. “Retirement is a major decision and there really is no magic number. The figure will differ for each individual based on their needs, goals and circumstances.”
When asked about their primary source of income in retirement, Canadians are clearly taking matters into their own hands and not relying on government help. Nearly three in ten (28 per cent) say their primary source of income will be their company pension and almost an equal number (27 per cent) expect that it will be income from their own investments. Only 17 per cent say their largest source of income will be a government pension.
The 18th Annual RBC RRSP Poll was conducted by Ipsos Reid from October 23 to November 5, 2007. The telephone survey was based on responses from a random sample of 1,200 Canadian adults (aged 18 and over). With a sample of this size, the results are considered accurate to within ±2.8 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population.
Your Future by Design® is RBC’s distinctive approach to help clients identify, plan, and realize their goals for retirement. With the guidance of RBC financial planners and investment and retirement planners, Your Future by Design helps clients create a blueprint for a successful lifestyle and financial plan for retirement based on what is truly important to them in key areas in life, including family, health, home, lifestyle, work/business, mind and spirit, and legacy. To find out more about how RBC can help build a blueprint for the future, visit www.rbc.com/yourfuture or call 1-866-335-4055.
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