Canadian women over 45 feeling confident about finances for retirement

Highlights:

• Canadian women over 45 are feeling fairly positive about their financial future, with more than seven-in-ten who are confident that they’ll be able to afford the lifestyle they want to live through retirement regardless of whether they are single or married.
• Factors driving women’s confidence include their retirement portfolio (55 per cent), their defined workplace pension or employer matching program (43 per cent), being in good general health (42 per cent) and their spouse or partner’s insurance or pension (32 per cent).
• The majority of women aged 45 and over (90 per cent) are taking some kind of action to prepare for retirement, with most putting money into a RSPs and TFSAs (60 per cent). However, room for improvement in other areas, including working with a financial advisor and exploring alternative investment solutions that could help ease some of their retirement concerns.

More active financial role, good health and good earnings are all reasons underpinning their positivity

 When thinking about their retirement years, Canadian women over 45 are feeling fairly positive about their financial future, with more than seven-in-ten who are confident that they’ll be able to afford the lifestyle they want to live through retirement regardless of whether they are single or married, according to a recent RBC Insurance survey.

A sound level of financial awareness and independent oversight when it comes to their retirement savings are likely bolstering this confidence. Among those women who are married or living with a partner, 84 per cent believe they have a strong understanding of their and their spouse’s financial needs in retirement; and only 34 per cent say their spouse/partner looks after their retirement savings.

“Last year we learned that women were feeling generally confident about their finances for retirement and we wanted to dig a little deeper to understand the reasons why,” said Selene Soo, Director, Wealth Insurance, RBC Insurance. “Women seem to be playing a more active role in managing their finances and understanding their retirement needs, leading to them feeling more prepared and in charge of their financial future.”

What’s Driving Confidence?
Women who feel confident about being able to afford the lifestyle they want through retirement are most likely to point to their retirement portfolio as the key factor. More than half (55 per cent) say their portfolio will carry them through, while more than four-in-ten (43 per cent) say the same of their defined workplace pension or employer matching program. Other factors driving their confidence include:

• Being in good general health and not anticipating any significant health-related expenses in retirement (42 per cent)
• Their spouse or partner’s insurance or pension being enough to maintain household spending power (32 per cent)
• Earning well and having a personal retirement fund that is on target (27 per cent)
• Having investment properties that generate income for retirement (17 per cent)

For the majority of women, confidence stems from relying mostly on their own devices, with only a very small proportion of women citing other factors such as access to spousal payments (9 per cent), children or family taking care of them financially (4 per cent) or a plan to live with friends to lessen the financial burden (2 per cent).

Causes for Concern in Retirement
While a significant number of women plan on maintaining their current good health as they age, they are under no illusions about the challenges that retirement can bring. The top three concerns heading into retirement are rising healthcare costs as they get older (69 per cent), living with a chronic illness (59 per cent) and outliving their retirement savings (50 per cent). Other concerns include:

• a lack of guaranteed income (50 per cent)
• having to give up things or activities they enjoy (44 per cent)
• feelings of loneliness, isolation or depression (39 per cent).

Taking Action to Prepare Financially
The majority of women aged 45 and over (90 per cent) are taking some kind of action to prepare for retirement, with most putting money into a RSPs and TFSAs (60 per cent). There is, however, room for improvement in other areas, including working with a financial advisor and exploring alternative investment solutions that could help ease some of their retirement concerns.
                                                                                                                                      Age 45+
Putting money in an RSP or TFSA                                                                                 60%
Working with a financial advisor/planner to create a plan                                              37%
Cutting down on non-essentials like travel/entertainment                                              29%
Buying stocks, bonds or mutual funds                                                                            27%
Delaying their retirement                                                                                                 23%
Living below their means to help meet future goals                                                        21%
Investing in segregated funds/other products to protect money from market volatility   14%
Investing in payout annuities/other products that provide a guaranteed income              8%

“Part of women’s financial oversight should include making sure they are aware of the options available for protecting while also growing their money and ensuring a continued stream of income that can carry them through retirement, despite market volatility or increased health expenses,” adds Soo.

When it comes to preparing for their financial future, Canadian women should consider the following:

• Products such as annuities that provide a predictable income stream for as long as you live, regardless of whether financial markets rise or fall.
• Estate planning is a key component for your financial legacy. Segregated funds can be a good option as they provide unique estate planning benefits which aren’t available in other types of investment products.
• In addition to good lifestyle habits, better financial preparedness reduces stress which leads to a healthier life. Especially for women in their 40s, an important step in retirement planning is securing their future potential to earn an income through disability coverage, should they suddenly find themselves unable to work due to an illness or injury.

About the RBC Insurance Survey
These are some of the findings of an Ipsos poll conducted between December 13 and 20, 2019, on behalf of RBC Insurance. For this survey, a sample of 1,000 Canadian women aged 45 and over with a household income of at least $60,000 were interviewed. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the population of women in this demographic according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±3.5 percentage points, 19 times out of 20, had all Canadian women aged 45 and over been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

About RBC Insurance
RBC Insurance^® offers a wide range of life, health, home, auto, travel, wealth, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, one of North America’s leading diversified financial services companies. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with approximately 2,900 employees who serve more than five million clients globally. For more information, please visit rbcinsurance.com.