- Retirement date may be impacted by unrealistic money targets
- Savings goals range from an average of $574,000 to almost $1 million
Canadian Boomers aged 50+ share one big concern as they approach retirement, regardless of their personal wealth: they haven’t saved enough money. What does differ, however, is the amount they are hoping to save.
According to the Boomers surveyed for the latest RBC Retirement Myths & Realities poll, conducted by Ipsos, the savings gap varies widely. On average, those with investable assets of $100,000+ want to save $949,000 and so far, are falling over $275,000 short. Those with investable assets of less than $100,000 want to save, on average, $574,000 and are over $500,000 away from their goal. (Investable assets typically include cash, bank account funds, retirement account funds, etc.)
What’s not clear is how realistic either of these savings goals is. “When you peel back the layers, many Boomers worry about their savings shortfall because they just don’t know where to start,” comments Rick Lowes, Vice-President, Retirement Strategy, RBC. “The best approach is to start with expectations including the lifestyle you hope to lead in retirement, retirement income options, and then build a plan to get you there.”
There are also a number of actions you can take ahead of retirement, including:
- Choosing whether to delay applying for your Canadian Pension Plan (CPP; QPP in Quebec) and Old Age Security (OAS) once you become eligible, to benefit from increased payments at a later age
- Determining all the sources of income you’ll be able to draw upon in retirement
- Taking full advantage of your RRSP and TFSA options
- Ensuring you have tax-smart strategies and the right investments – and asset mixes – to help maximize your savings
The RBC poll found that not-yet-retired Boomers¹ are considering a number of options to boost their retirement income, including:
- Downsizing/moving – 52%
- Working in retirement – 41%
- Borrowing against home equity – 25%
- Relying on an expected inheritance – 21%
- Hoping to win the lottery – 3%
“No-one should be relying on an inheritance or a lottery win. We also don’t want anyone feeling discouraged by unrealistic savings goals or thinking they don’t have enough time. Concerns like these can be overcome by taking control of your finances,” continues Lowes. “There could be some tough choices ahead. A half-hour conversation with a financial planner can help you get started and shape your retirement plans to make a real difference to your financial future.”
Regional & Gender Comparisons
Non-Retired Canadians Aged 50 and Over¹
About the 2019 RBC Retirement Myths & Realities Poll
These are the findings of the RBC 2019 Retirement Myths and Realities Poll, conducted by Ipsos between April 2 to 8, 2019. For the overall survey, a sample of 2,000 Canadians aged 50+ was interviewed via the Ipsos I-Say panel and non-panel sources. Quotas and weighting were applied to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. For this release, the data referenced is among a sample of 900 aged 50+ who are pre-retirees with investable assets of $100K or more, and 100 aged 50+ who are pre-retirees with investable assets of less than $100K. The credibility of Ipsos online polls is measured using a credibility interval. In this case the results are considered accurate to within ±3.5 percentage points, 19 times out of 20, for the full sample of pre-retired Boomers, ±3.7 percentage points for those with investable assets of $100K+, and ±11.2 percentage points for those with investable assets of less than $100K.
About RBC’s Retirement and Financial Planning Resources
RBC Retirement Planning can help you plan for the 30 years or more you may spend in retirement. This website also includes links to financial planners/investment & retirement planners who can help you determine the retirement lifestyle you hope to live, the sources of income you’ll be able to draw from when you retire, the advantages RRSPs and TFSAs offer for your retirement and considerations to make before applying for your CPP/QPP. Our financial advice is complemented by a free service unique to RBC – MyAdvisor – which connects clients to advisors and financial planners for face-to-face, real-time video or phone meetings, where together they can view and adjust a client’s comprehensive financial picture.
SOURCE: RBC Royal Bank