New LIMRA report points to lack of knowledge and planning
WINDSOR,Conn., Nov. 24, 2014—A new LIMRA Secure Retirement Industry report finds that nearly a third of Canadians aged 55 to 70 do not know when they will retire. The oldest members of the group (ages 65 to 70) are the most undecided about when they will retire, with about one in 10 having no intention of ever retiring.
“Many in Canada are scaling back their expectations about retirement, and are either undecided about when they’ll retire or don’t ever plan on retiring,” said Sally Bryck, associate research director, LIMRA Secure Retirement Institute. “These findings point to a strategic, education and savings shortfall.”
The report, Ready, Set, Retire? Not So Fast!...Revisited: A Canadian Consumer Retirement Study, is a follow-up to two previous studies that LIMRA conducted in Canada, one in 2010 and the other, 2012.
“Our 2014 study has found that even when they are eligible to retire, some Canadian pre-retirees will not have enough money to retire, and will remain working—if their health and employer even allow them to continue to work,” said Bryck.
As in 2012, the majority of Canadian pre-retirees acknowledge in the latest study that they will need more guaranteed lifetime income in retirement than they expect to receive through their government pension plans. More than a fifth of those surveyed say having guaranteed income for life is the most important feature when selecting products to create income in retirement.
“This gap creates an abundance of opportunities for the financial services industry to help pre-retirees chart a course to a solvent retirement,” noted Bryck.
Three in 10 pre-retirees do not have primary financial advisors to reach their financial goals. But among those pre-retirees who have financial advisors, six in 10 consider the advice they receive to be very valuable.
“There’s been renewed emphasis on the importance of planning for retirement, so this may be playing a key role in the uptick,” said Bryck. “And our report shows the value advisors can bring to the retirement equation.”
“It’s good that awareness is growing around the need for thinking ahead. But the industry, through outreach, can do more to educate and advise pre-retirees about what they should be doing and when they should be doing it. This can go a long way toward improving retirement readiness across Canada,” said Bryck.
LIMRA conducted the study in late 2013. The sample included 1,800 respondents polled by research vendor Greenwich Associates.
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The LIMRA LOMA Secure Retirement Institute provides comprehensive, unbiased research and education about all aspects within the retirement industry to improve retirement readiness and promote retirement security. For information on the LIMRA LOMA Secure Retirement Institute, visit: www.secureretirementinstitute.com.