Canadians Looking At A Working Retirement

January 21, 2003 ( - Some 72% of non-retired Canadians now report strongly considering working after they retire.

Canadians planning for retirement say they will earn more through their retirement years, as 74% of non-retired respondents they plan to use ‘earned income’ as their primary or secondary source of retirement income.   The results of the Investors Group survey show a contrast between those Canadians planning for retirement and the actions of current retirees, as only 23% of retired Canadians indicated they are currently working.

Despite the 72% who assume that work will be a part of their retirement, 59% of current working Canadians have not determined how much money they will need in retirement. Further, the number of Canadians planning an early retirement seems unaffected by this lack of knowledge. The survey found that 41% of Canadians intend to retire before age 60, despite 53% of them not knowing how much money they would need.

Down Market

Overall, most respondents indicated they have not adjusted their retirement plans as a result of lower stock market returns.   However, 19% did make changes, indicating adjustments that included earning more in retirement, saving more and spending less. Not surprisingly, these results were split down retirement lines.   In addition to the 72% of non-retirees that plan to earn more money during retirement, 80% also plan on saving more as a result of stock market volatility. On the other hand, 78% of retired respondents plan to spend less, with 42% planning on lowering their lifestyle expectations.

With the prolonged bear market, more Canadians will rely on government and corporate retirement programs for income.   Seventy-six percent report Canada Pension Plan (CPP) payments will be either their primary or secondary source of income after they retire and 73% said they intend to rely on their Registered Retirement Savings Plan (RRSP).   To a lesser extent, 62% of respondents intend to rely on their employer pensions as their primary or secondary source of income.   A minority of respondents (22%) are even relying on an inheritance to improve their financial situation.

The source of retirement income was divided along generational lines, as younger Canadians (less than 50 years old) are more likely to expect to generate their own retirement income through employment earnings or investments while retirees are more likely to rely on government pension payments.   All age groups shared similar opinions on the outlook for business and employment conditions over the next year, but retired Canadians were more likely to be confident of their ability to cope financially with an unexpected event in their life, while younger Canadians were more likely to be confident that their financial situation will improve over time.