According to a survey conducted by ING Direct, 30% of Canadians say they have found a way to work after retirement. The main reasons mentioned? Lack of financial resources, underestimating the savings required and a higher cost of living than expected.
While there is no mandatory retirement age in Canada, people who want to stay on the labour market as long as they wish are increasingly being joined by those who are forced to do so. According to the survey conducted by ING Direct, 48% of the 1,000 Canadians interviewed at least 55 years old expressed their need to continue working to make ends meet. Of these, 31% say they will have to continue to work full time.
Another survey from the financial institution reported a poor estimate of the savings required in 33% of cases, while 31% indicate that they are having to face a higher cost of living than expected. These same people regret at the same time not having been able to find more solutions to save, not having saved earlier or even having overspent in the past. The President and CEO of ING Direct, Peter Aceto, recalled the importance of not neglecting planning for retirement to avoid such a scenario.
Incentives to work to age 70
According to the results of another survey unveiled last August by the BMO Wealth Institute, the average amount baby boomers say they each need for their retirement would be $658,000. However they will only have saved an average of $228,000. A good proportion of them are therefore not adequately financially prepared for their retirement. According to Statistics Canada, a couple of middle aged persons spent $54,100 per year in 2009.
The reduction in recent years of retirement pensions paid by the State plays a significant role in this shortfall for seniors. By 2030, the birth rate in Canada will be about 40% less than the level required to prevent a long-term decline in the population. It’s therefore not possible to count on a reversal of the situation faced with the announced shortages of manpower. At the same time, incentives have even been put in place to encourage elderly persons to retire later. So workers who stop at age 70 instead of age 65 will affect 42% more of the share of public retirement, the Canada Pension Plan.
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