Pattie Lovett-Reid: RBC poll shows Canadians rethinking their retirement plans due to pandemic
There have always been wildcards when it comes to funding your retirement. Market volatility, saving too little and living too long. Health-care costs and longevity have also been big retirement concerns that have created angst for retirees worried about out living their money.
Not surprising given the last 18 months many have given more thought to their retirement dreams.
According to a new poll by RBC Canadians Retirement Myths and Realities, Canadians are rethinking what their retirement could look like, when they could in fact retire and how much money they will require to do so.
It is unlikely anyone factored in the fear of a pandemic delaying retirement until now.
The reality is the immediate impact from the pandemic has caused some Canadians to hit the pause button on their retirement date, according to the poll. Eighteen per cent said they will now be retiring later than planned with the highest response being in Alberta (33 per cent).
Fear of outliving your money has consistently been a concern but has now been elevated.
That fear has now hit its highest level in a decade. In fact, 21 per cent of those with more than $100,000 in investable assets said now they expect to outlive their saving by 10 years and estimate they will need to save on average approximately $1 million. That is $50,000 more than in 2019 – with over 3/4 falling short of their goal by almost $300,000.
The pandemic has forced people to think through their retirement or take action.
- 22 per cent are more focused on where they want to live and where they don't – 20 per cent do no want to live in a retirement home
- Reviewing and updating their wills and beneficiaries were the focus for 15 per cent
- Taking closer stock of their financial affairs (17 per cent)
- Taking up a new hobby or career, realizing life is too short (16 per cent)
In today's environment for many the focus has shifted to what is in their immediate control to bridge financial shortfalls.
Here are a few of the strategies highlighted for those with $100,000 or more saved for retirement.
- Many are choosing to stay in their home and live more frugally (36 per cent)
- Return to paid work (36 per cent)
- Considering downsizing or moving (23 per cent)
- Asking a family member for financial assistance (five per cent)
Before you panic and feel retirement is all doom and gloom, hit the pause button on this emotion. It is still wise to go back to your base case assumptions and understand your financial facts. Begin with determining how much money you will have coming into your household and from what sources, what it is you are spending your money on and what does your retirement lifestyle look like?Sure you may have to alter your plan to achieve your goals but without having a plan and knowing your numbers you may be comprising on your retirement dreams