A majority of Canadians aged 45 to 59—or “near-retirees”—expect their retirement income will be sufficient or more than adequate to maintain their standard of living once they leave the workforce, according to a report.
The Statistics Canada report finds that 62% expect their retirement income will be adequate and another 7% expect it will be more than adequate. However, others are less confident—19% expect their income will be barely adequate and 9% expect it to be inadequate or very inadequate. And 3% just don’t know.
Certainty regarding positive expectations of one’s retirement income and planned age of retirement are interrelated.
“Over 90% of near-retirees who expect their retirement income will be adequate or more than adequate to maintain their standard of living are very or somewhat certain of their planned retirement age,” says the report, “while this is the case for about 43% of near-retirees who expect their retirement income will be less than adequate.”
Plans and expectations about retirement timing, certainty and income adequacy often cluster together. Individuals who are most uncertain about their retirement plans often predict they’ll work until 65 and are often unsure about their retirement income. On the other hand, those who are sure of their plans are more likely to expect to retire around 60 and express confidence in their financial future.
When it comes to employment status, the plans and expectations of self-employed workers are significantly different from those of paid employees. Twenty-two percent of the self employed say they have no plans to retire compared to just 8% of those who work for a company .
Those with pension coverage are about 10 percentage points more likely to be certain about their planned age of retirement than those without. And employees who belong to a union are about five percentage points more likely to be very certain about their planned retirement age than their non-union counterparts.
The findings are similar for expectations regarding retirement income. “Having pension coverage, being in a union, or being in a job longer increase the likelihood that people perceive their income to be adequate,” says the report.
Health is an important consideration in retirement transition and is strongly correlated with plans and expectations. Two-thirds of those who say their health is very good express certainty regarding the timing of their retirement compared to less than half of those who rate their health as fair or poor.
Retirement plans and expectations also differ when it comes to marital status. Individuals without a spouse or partner are less likely than their married or common-law counterparts to be certain about the timing of their retirement (54% and 63%, respectively) and confident in their retirement savings (55% and 72%).
“Part of this difference is attributable to lower household incomes among non-married individuals,” the report says. “Yet even when household income and other characteristics are taken into account, non-married individuals are still less likely than their married/common-law counterparts to express confidence in their retirement plans (a difference of almost five percentage points) and in their retirement savings (a difference of over seven percentage points).”
The retirement outlooks of immigrants are different from those born in Canada. Near-retirees who immigrated since 1990 are less likely than the Canadian-born to express certainty about their retirement plans (44% and 64%), to have confidence in their retirement savings (50% and 71%), and to retire before turning 60 (9% and 32%).
The report says although it may not come as a surprise that retirement outlooks are related to health and pension coverage, the size of the differences across these characteristics—often 20 or 30 percentage points—indicates how different the future looks to Canadians in different circumstances. “In this respect, the ‘baby boom generation’ is far from homogeneous.”
To read the report on Statistics Canada’s website, click here.
To comment on this story, email craig.sebastiano@rci.rogers.com.