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One-third of older Canadians accelerate retirement, while expenses and purchasing power remains top concern: RBC Insurance

Good planning is critical in driving confidence around their future finances

TORONTO , May 10, 2022 /CNW/ - Changing external factors like the pandemic, economic uncertainty and inflation have prompted Canadians aged 55-75 to shift when they plan to retire. One-third (33 per cent) of recently retired Canadians say they retired sooner than planned, while three-in-ten (30 per cent) pre-retirees intend to change their retirement date because of the pandemic, according to a new survey from RBC Insurance.

Among Canadians who have already retired, more than a quarter (28 per cent) are spending more than anticipated, while four-in-ten (41 per cent) have experienced unexpected expenses, including major home repairs (16 per cent), healthcare or transportation costs (12 per cent) and helping family out financially (12 per cent), all of which are further exacerbated by rate hikes and inflation.

"The events of the last two years are clearly affecting Canadians – including those nearing retirement," says Selene Soo, Director, Wealth Insurance, RBC Insurance. "And with the current high inflation rate added to the mix, many are feeling concerned about their purchasing power and increasing expenses. What people must remember is they can take control – good planning is critical in driving confidence around their future finances."

As Canadians live longer, the impact of inflation on savings, expenses and purchasing power is the most pressing concern for three-quarters (78 per cent) of those surveyed, as well as a lack of guaranteed income (47 per cent) and outliving their savings (48 per cent). Additional concerns included outliving their spouse, feelings of loneliness and not having a financial legacy to leave behind. Yet Canadians are still largely relying on traditional savings tools such as TFSAs (54 per cent), RRSPs (53 per cent) and CPP/QPP/OAS (52 per cent) to ensure they have enough money to afford their lifestyle once they stop working. Fewer are taking advantage of annuities (7 per cent) or segregated funds (3 per cent) even though these tools can help address many of the retirement concerns expressed.

"It's important to protect the money Canadians have worked so hard to save," adds Soo. "But for many who may be in retirement longer than originally planned, the right tools can help ensure a guaranteed income or enough to leave behind a legacy – regardless of other external factors."

In fact, a priority for the majority (58 per cent) of those aged 55-75 – whether retired or not – is evaluating will and estate planning. To help protect and grow your money for you or your loved ones, and to help preserve spending power in retirement, consider the following:

  • Consider investing in products such as Segregated Funds, including Guaranteed Investment Funds (GIFs) that can keep all, or a significant portion, of your original investment safe while it grows, and offer unique estate planning benefits.
  • Look at different investment options such as Annuities. These provide a guaranteed, predictable income stream for as long as you live that doesn't fluctuate with the market or interest rates.
  • Speak to a financial planner or insurance advisor to discuss options and help ensure you're on track to meet your long-term financial goals.

 

About the RBC Insurance Study

These are some of the findings of an Ipsos poll conducted between March 8th and 10th, 2022, on behalf of RBC Insurance. For this survey, a sample of 1,000 Canadians aged 55-75 was interviewed online. Quotas and weighting were employed to ensure that the sample's composition reflects that of the Canadian population according to census parameters. 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.

About RBC Insurance

RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, annuities 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 2,800 employees who serve more than five million clients globally. For more information, please visit rbcinsurance.com.

SOURCE RBC Insurance