Many people worry about achieving a debt-free retirement
Canadians' belief in their ability to retire comfortably and free from debt has declined from 2016 to 2022, according to a research report by the Canadian Public Pension Leadership Council (CPPLC).
In September 2022, CPPLC commissioned Pollara Strategic Insights to conduct an online survey with 2,001 randomly selected Canadians, encompassing different age groups, genders, and locations. The survey explored retirement expectations, aspirations, and strategies, drawing comparisons to a 2016 Ipsos Reid poll commissioned by CPPLC, which included many of the same questions.
"We checked in with Canadians on their feelings about retirement. We see they are less confident about their finances than they were in 2016," said Derek Dobson, co-chair of the CPPLC.
"Many worry they could run out of money during retirement. People have been through the COVID-19 pandemic and cost-of-living increases. The financial stress they are feeling affects workplaces and households throughout Canada."
The survey revealed that in 2022, Canadians were 15% less confident in their ability to retire on time compared to 2016. Respondents anticipated working approximately six years longer than their desired retirement age and were also 16% less likely to believe they could retire without debt.
"The data shows how geography, gender and access to a workplace pension may have affected Canadians' retirement perceptions during the last six years," Dobson said. "As a group, Canadians are less confident they will achieve their financial objectives. They are also hesitant about managing their own retirement savings."
Key findings highlighted in the report include:
- Retirement-related concerns impacted various aspects of Canadians' lives, including personal health (28%), career decisions (23%), and employer choice (23%).
- Women expressed a 12% higher level of apprehension about running out of money during retirement compared to men.
- Residents of British Columbia and Ontario exhibited the least confidence in maintaining their standard of living during retirement. These provinces experienced high rates of unaffordable housing in 2021, particularly in Toronto and Vancouver, according to data from Statistics Canada.
- Canadians harbored concerns about the impact of climate change on their expenses, with 71% believing it will escalate their daily living costs.
- Approximately one in five Canadians without a workplace pension felt confident about retiring on their desired timeline while sustaining their standard of living. However, this figure improved to one in three among Canadians with a workplace pension plan.
"In Canada, 60 per cent of people do not have a workplace pension plan. These results highlight a pressing need to expand retirement income coverage in Canada," Dobson said. "We also recommend employers continue to invest in financial literacy programs for employees."
