Canadians want to live a full lifestyle in their retirement and see many things as being important to their enjoyment, according to a recent survey by Ipsos for RBC Insurance. For Canadians aged 55 to 75, keeping a sense of independence trumps all: eight in 10 (80 per cent) want to live at home for as long as they can and 72 per cent say it’s important to own a car. The majority also say it’s important for them to be able to travel at least once a year (68 per cent), shop for the things they want (62 per cent), and go out for lunch or dinner a few times a week (53 per cent).
Yet, while the retirement years can be a time to enjoy life to the fullest, having enough money to support their desired lifestyle is a real concern. In fact, a majority (62 per cent) are worried about outliving their retirement savings.
“Canadians are living longer than in years past, and they want active and productive lifestyles in retirement,” explains Jean Salvadore, Director, Wealth Insurance, RBC Insurance. “However, some are better prepared for retirement than others. Having sufficient retirement savings is critical, and Canadians should consider a combination of tools and a well-diversified retirement plan to ensure they have enough money to stretch over decades.”
Planning for the future – but still not confident
Despite using various financial tools for retirement savings such as RRSPs (45 per cent), cash savings (43 per cent), or TFSAs (39 per cent), 45 per cent of Canadians are still not confident that they will have enough money in retirement to afford the lifestyle they want.
Furthermore, only one in 10 Canadians (12 per cent) say they are using/planning to use an annuity to ensure they have enough money to lead their chosen lifestyle in retirement.
“An annuity provides a predictable income stream for as long as you live. They are particularly helpful if you have a certain amount of fixed expenses you want to cover throughout your retirement, and that way you can use your additional savings to fund those activities that are important to you,” adds Salvadore. “Yet, most Canadians are unaware of annuities and lack an understanding of the product, which can be the very reason why few are building them into their retirement plan.”
Annuities knowledge gets a “C” grade
Canadians aged 55 to 75 get an average grade of “C” when their knowledge of annuities is put to the test, scoring an average of 3 out of 5 questions right.
- Nine in 10 (91%) know they don’t need to invest their entire retirement savings into an annuity
- Seven in 10 (72%) know it’s possible to invest in an annuity using their RRSP and/or RRIF savings
- Six in 10 (63%) know that an annuity provides a predictable income stream for as long as they live, regardless of whether financial markets rise or fall
- Six in 10 (63%) know they can stagger their annuity purchases to help increase payouts
- Just three in 10 (28%) know that an annuity does not have to be managed once it has been purchased
About the RBC Insurance Survey
These are some of the findings of an Ipsos poll conducted between November 13 and November 17, 2017, on behalf of RBC Insurance. For this survey, a sample of 1,000 Canadians aged 55 to 75 was interviewed including 500 Canadians aged 55-64 and 500 Canadians aged 65-75. Weighting was then employed to balance demographics 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. 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 Canadians aged 55-75 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 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 2,500 employees who serve more than four million clients globally. For more information, please visit rbcinsurance.com.
SOURCE RBC Insurance