TORONTO—Canadians won’t be hanging up their working boots until much later in life, according to a new study by Sun Life Financial.
Sun Life’s 2011 Canadian Unretirement Index found that even though the economy has picked up, workers aren’t planning to retire until they’re 68—three years older than reported in the previous year’s study.
“Canadians’ retirement-readiness and outlook towards retirement has taken a big hit this year,” said Paul Moser, spokesperson with Sun Life Financial.
The overall confidence of workers —measured by issues such as employer benefits and personal finance— dropped from 51 in 2009 to 39 last year.
Moser says one possible reason for the decline is that Canadians didn’t get the big economic rebound many had hoped for.
While the recession is over, unemployment is still high and Canada’s GDP is growing slowly.
The study also noted struggling economies elsewhere in the world still pose a risk to Canada’s fiscal well-being.
The average retirement age in Canada fluctuated depending on factors such as gender, region and income.
Employees earning more than $100,000 planned to retire at 65 while workers making less than $50,000 didn’t expect to pack things up until 70.
Higher income earners were more likely to keep working for personal fulfillment, but those at the low end of the pay scale were most likely to stay in the workforce just to cover basic living expenses.
The study also found that the closer Canadians got to retirement, the less optimistic they became about it.
Workers in their thirties and forties planned to call it quits at 67 while those in the 60-65 age range weren’t expecting to retire until 72.
Men were more likely than women to continue working past the traditional retirement age.
Ontario outlook below average
Confidence also varied across the country when it came to retirement savings.
Only 27 per cent of Ontario workers were satisfied with their nest eggs compared to 45 per cent in the prairies and 32 per cent nationally.
In B.C., just 28 per cent were confident, in contrast to 37 per cent in Alberta and 33 per cent in Quebec.
The study noted that the least hopeful provinces had some of the lowest proportions of group retirement coverage.
That kind of support and planning can improve employees’ retirement prospects, the study said.
Workers with an employer-sponsored plan, financial plan or advisor were nearly twice as confident about retirement and finances than those who didn’t have a plan.
Some economists say those results aren’t surprising.
“Most of the baby boomers who are now starting to retire in significant numbers lack good workplace pension plans. Many will work later in life than today’s retirees,” said Andrew Jackson, chief economist with the Canadian Labor Congress (CLC).
The CLC launched a campaign last week calling for improvements to the Canada Pension Plan.
It proposes changes to the CPP to provide Canadian workers with more retirement security than RRSP or other private sector investments.