Americans twice as likely to worry they’ll run out of money in retirement than Canadians, cross-border TD poll finds
Americans are twice as likely to worry they'll run out of money in retirement than Canadians, according to the first annual TD North American Report on Retirement. Close to 70% of Canadian retirees say that their retirement is exactly
or mostly what they were expecting, in contrast to only 47% of
Americans. 28% of American retirees say they might need to find a job to supplement their retirement income (vs 10% of Canadians.)
One in four Americans say they are not living their retirement
dream at all and 29% of American retirees say their retirement is quite
different from what they imagined.
Financial crisis has spawned a North American retirement crisis?
"As a North American institution, we have an enduring focus on what our
clients are experiencing on both sides of the border. We've seen
firsthand that the financial crisis and resulting economic impact has
been tough on everyone," says Frank McKenna, Deputy Chair, TD Bank
Financial Group [pictured left].
"However, north of the border, Canadians' more
conservative approach to finances and our country's intact banking
system have given retirees greater peace of mind and an increased
likelihood of living out their retirement the way they planned."
McKenna was mentioned in a press release issued this morning. TD Bank Financial Group is North America's six largest bank. The poll of 1,009 retired Americans and 1,002 retired
Canadians (aged 55 to 70 so most but not all would be baby boomers) was conducted by Angus-Reid Public Opinion in mid January.
Americans more worried about their finances than Canadians
TD says how retirees feel about retirement is linked to their financial situation. American retirees are more concerned about their finances than Canadians: 38% of Americans say they definitely did not save enough money, versus just 21% of Canadians. While 21% of Americans worry they did not start saving early enough, only 10% of Canadians feel that way.
"There is a somewhat negative stereotype that Canadians are staid when it comes to finances," says TD Waterhouse senior vice president Patricia Lovett-Reid [pictured, right], "Perhaps, but when it comes to banking and investing, staid is good."
Half of Americans spending less in recession but enjoying life, vs 37% of Canadians
The findings show Americans are still enjoying life, though they did not weather the recession as well as their northern neighbours. Half of Americans surveyed are now spending less as because of the recession but are still enjoying themselves (compared to 37% of Canadians).
But one in four American retirees are worried they will run out of money: 28% say they might need to find a job to supplement their retirement income. Canadian retirees are more confident: 30% say they were not impacted by the recession, with 12% concerned they might run out of money and 10% considering job hunting.
Americans focus on physical health, Canadians on financial health
The top advice from American retirees is not financial advice. Americans first recommend that retirees take better care of their health (53%) and second, talk to their spouses before retiring to ensure they have the same vision (50%), followed by maxing out their 401(k)s (38%).
By contrast, Canadians are more focused on their financial health. The top advice from Canadian retirees is to max out an RRSP (48%) and then to talk to their spouses about retirement dreams (46%) followed by taking care of their health (36%).
"These findings reflect my experience in both countries, that while Canadians and Americans are incredibly similar in many ways, there are significant differences in attitudes and behaviours," says McKenna. "With an aging population in both countries, it is essential to understand the current experiences of retirees, both positive and negative."
Biggest mistake: not starting saving till past 40
Asked about the mistakes they made in planning for their retirement, many say they did not start saving until they were over 40 (28% of Canadians retirees and 32% of Americans). And the second biggest? Living beyond their means for most of their life: cited by 13% of Canadians and 19% of Americans.
Among the smartest things retirees say they did in planning for their retirement were working for a company with a matching retirement savings plan or pension plan (39% of Canadians and 27% of Americans) and living within their means (28% of Canadians and 27% of Americans).
"Living within your means is ideal, particularly if you know what those "means" will look like in retirement," says Lovett-Reid. "What you want for retirement are a series of choices, not a series of takeaways. Talk to an advisor about how you may envision your retirement and develop a custom financial plan to help you get there."
For more, click here.
P.S. Added Thur., Feb. 11: A version of this blog ran in various Canwest dailies today under the headline Americans finding ideal retirement only a dream.
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Source The Wealthy Boomer : Retirement
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