Choosing a retirement date is not as obvious as we might believe. A new Sun Life Financial study of 2,799 people shows that Canadians do not retire when they plan to. The main reason for this change of plan is their health.
Sixty-nine percent of retired Canadians did not stop working by the date they had intended. Among them, 41% had to stop working before the age they had set because of their health.
Forty-five percent of respondents had also experienced a serious health problem or an accident, of which 42% suffered personal financial consequences as a result. Twenty-five percent had even incurred a partial or total reduction in their savings.
Health, an important yet unanticipated concern
Eighty-two percent of Canadians using the services of a financial advisor think they can cover their medical costs during retirement, compared to 66% of those managing their finances on their own. And although they consider that the decline in their health will be an important concern over time, only 22% have saved money or have planned a way to cover their health expenses during their retirement. Fifty-three percent of survey respondents admitted to worrying about the cost of medications and medical care during retirement. Forty-seven percent fear having to stay in a long-term care facility for a longer period of time than they can financially afford. And 45% fear exhausting their retirement savings during their lifetime.
Money, the leading source of anxiety
Health is not the only source of worry for Canadians. In fact, 23% reported having been affected by mental illness. The burden of stress remains too significant, with 76% of respondents saying they have experienced at least one source of excessive stress. What is the leading cause? Money, with the three primary factors being: personal and household finances (41%), the idea of having to follow a budget (31%) and unplanned expenses (30%). Personal relationships (29%), work life (25%) and health problems (25%) follow behind.
In light of the results of this study, Robert Dumas, new President of Sun Life Financial Quebec, encourages Canadians to implement steps for managing their finances. As such, he pointed up that people using a professional for financial advice are more likely to end their career as planned, that is 40% compared to the 25% who do not.