Wealth Strategies: Canadians Views On Retirement

Retirement is a complex life stage to prepare for, with many intricacies, moving parts and assumptions made along the way. It also evolves over time with societal, economic, tax and political changes.

There are vastly different views amongst Canadians, and widely varying circumstances on the way to their eventual retirement. Fidelity has in turn produced an annual retirement report for 19 years now, outlining many of these differences.

Based on the most recent survey, most Canadians indeed have a positive outlook on retirement, but this proportion has declined if we compare to prior years. For example, this year clocked in at 69% positivity versus 80% as recently as 2018. This was driven by numerous factors, such as macroeconomic challenges, slowing economy, rising rates and market conditions.

Many retirees indicated that they don’t feel they’re receiving enough money in retirement. Oddly, however, most Canadians (retirees and pre-retirees included) also indicated that their retirement savings aren’t being depleted. Despite some of the headwinds of late, both groups felt that their savings have been resilient.

As expectations toward retirement evolve, it's worth noting that most pre-retirees predict that they'll continue to work in some capacity during retirement. A larger percentage of pre-retirees are also considering postponing their retirement.

The decline in the overall outlook of retirees this year was, in large part driven by those without a written financial plan. This has proven to be the case year after year in this study, which strongly illustrates that those with a proper financial plan have a more positive and informed outlook.

This is a very important point to address, as the exercise of creating and updating a financial plan is a crucial one in executing a well-thought and planned retirement. Most Canadians do not have a written financial plan, and even for those that do, a significant proportion have not considered how to make a tax-efficient wealth transfer to the next generation.

A competent financial advisor is therefore an integral part of ensuring both a secure and well-planned retirement, and a smooth transition to the generations to follow.

*Data derived from Fidelity Annual Retirement Report

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Opinions and estimates are written as of the date of this report and may change without notice. Any commentaries, reports or other content are provided for your information only and are not considered investment advice. Readers should not act on this information without first consulting Milestone, their investment advisor, tax advisor, financial planner or lawyer. This communication is intended for Canadian residents only and does not constitute as an offer or solicitation by anyone in any jurisdiction in which such an offer is not allowed.