By Joyce Wayne
Only about one in three older Canadians are confident they’ll be able to retire when they hope to. In a new report published by the National Institute on Ageing (NIA) entitled “Growing Older in Canada”, released in early February, the researchers found that only 35 percent of Canadians age 50 and older, who are currently working, believe they are in a financial position to make retirement possible while 39 percent reported that they are not in the financial position to do so. This research is based on the information received from 5,975 Canadians in 2023.
The co-author of the study, Keith Neuman of the Environics Institute, told BNN Bloomberg that “the findings are tied to financial uncertainties around workplace pensions, changing income sources and other broad challenges.”
The survey also included Canadians who are 80 and older, finding a small percentage of people in that demographic who are still working when they wish to retire. “Among them, only about half feel that they could retire,” Neuman told BNN Bloomberg.
On a more optimistic note, another author of the study, Natalie Iciaszczyk, research program manager at the National Institute on Ageing, told BNN Bloomberg that overall, “older Canadians are doing pretty well in terms of their financial well-being.” Yet she adds that among those surveyed, only about 33 percent said they were in a position to save for their retirement.
So, which is it? Are older Canadians doing ’pretty well’” or are many struggling. After reading the report, I’m unconvinced that the outlook for retirees is particularly rosy. The majority of older Canadians wish to retire, but close to 40 percent are not sure they have the financial resources to do so. The Toronto Star’s angle on this NIA annual report differs from that of BNN Bloomberg’s. It’s less optimistic. Star staffer Moira Welsh, who often covers aging issues, reports, ‘One in four Canadians aged 50 and older said they did not currently earn enough money to adequately cover household expenses and other financial priorities. Of those, 17 percent said they felt financially stretched, and seven percent reported having a hard time making ends meet…. Some older Canadians fear they will outlive their money, a concept that is increasingly worrisome to those moving closer to their retirement years.’
Dr. Samir Sinha, the NIA’s director of health policy research, said, “People are nervous about retirement — and for good reason.” Many of us who are now retired or considering retirement grew up when most Canadians left work at 65 years of age or earlier. Certainly, lifespans were shorter fifty years ago; still, defined benefit pension plans were common, and the cost of housing and groceries during the post-World War II years was neither as volatile nor as foreboding as it is today.
Financial Challenges for Retirees
Yesterday, my husband and I went grocery shopping at our favourite store. It’s Starsky’s in Mississauga, a Polish-run and themed grocery store that suits our tastes. Our ancestors are from Eastern Europe, so we enjoy the delicatessen counter filled with cabbage rolls, perogies and borscht. The cheesecake is to die for. The best part is that the prices are lower than those found at huge grocery chains. When we shop at Starsky’s, we tend to spend less, buy more, and eat out less in restaurants. Both of us have pension plans, yet we’re finding it increasingly challenging to stay within our budget as inflation remains high in Canada.
Last weekend, between paying household utility and telecommunications bills, quarterly municipal taxes and the grocery bill, we spent more than $2000. When I retired from teaching ten years ago, I never expected expenses to rise so quickly.
Retirement Savings: Planning for the Future
If you’re like me and you’re retired, you are counting your pennies more carefully than ever, staying home more often and spending much less on frivolities such as lengthy vacations or fancy clothes. Many of us are concerned that we could outlive our savings. Dr. Sinha says, “What was eye-opening about the survey is how concerned people are about their financial security as they age. What we’re seeing in the over-50 crowd, for example, is that they are getting near to that traditional age of retirement, but not really confident that they’d actually saved up enough money to be able to do so successfully.”
Retirees wish to maintain their pre-retirement standard of living and while the NIA report advises that adequately saving for retirement is the way to achieve that goal, it’s becoming harder and harder to do so. The report also notes: “Canadians have been struggling with this, even before having to cope with the post-pandemic spike in inflation.” Increasingly, older Canadians are more likely to be carrying debt than those in previous decades.
Yet, there are realistic choices. Among today’s retirees, there remains a high percentage of home ownership. More than 95 percent of retirees wish to age in place, in the home where they feel secure and comfortable. Reverse mortgages can solve the concerns about outliving savings or having to budget so strictly that it becomes difficult or impossible to cover expenses.
If you’re interested in learning about the CHIP Reverse Mortgage and how it can supplement your retirement lifestyle, please call us toll-free at 1-866-522-2447. Our reverse mortgage specialists will be happy to assist you!
