Almost half the 50-plus crowd feeling "trepidation" about likely retirement income
A poll of 584 Canadians aged 50 or more finds 46% lack confidence that the pension and retirement system will provide them with a comfortable retirement.
The poll released today by TNS Canadian Facts got a "startling" response to its question on how well they thought the current system meets their needs: 67% or two thirds said "not well or not very well", 47% suggested some reform was needed and 20% called for "extensive" reform.
Fortunately, it appears these "recent events" have given many aging baby boomers a wakeup call. The survey finds many are changing their behaviour, with 41% saying they will boost their personal savings and investments so as to become less dependent on employer or government pensions.
82% support more TFSA contribution room
One of the most popular suggestions for reform was for more contribution room for Tax Free Savings Accounts (TFSAs), supported by 82% of those polled. (For more on the retroactive TFSA idea, see this blog entry from last summer.) The same percentage believe funds under the CPP should be guaranteed against bankruptcy and that pension surpluses should belong to plan members rather than their employers. A similar 80% believe the self-employed should have the right to voluntary supplementary CPP contributions and benefits, while 76% think pensioners should get priority in the event of bankruptcy.
26% expect to live "day to day" in retirement
Looking at the survey in more depth, Question 3 was "How comfortable are you financially/do you believe you will be in your retirement?" Only 5% said they will not live comfortably but 26% said they expect to live day-to-day. But almost seven in ten expect to have adequate means (49%) and a standard of living as good or better than they enjoyed in their working years (21%).
Similarly, Question 4 on confidence in the system, revealed that 37% are "somewhat confident," 11% "very confident" and 4% "completely confident that the current three-stooled retirement system will be there for them (that is, employer pensions, government pensions and private savings chiefly through the RRSP/TFSA/non-registered savings). However, 28% were "not very confident" and another 18% "not at all confident."
More likely to use savings accounts than TFSAs
One strange finding that may not be statistically significant is that more people — 47% — said they are "likely to use" [taxable] savings accounts than Tax Free Savings Accounts [46%.]. That would suggest there is still plenty of ignorance about TFSAs, as the recent Mackenzie survey suggested. 60% cited RRSPs. In that group, 45% use mutual funds, 20% [individual] equities or stocks, 18% bonds and just 4% exchange-traded funds (ETFs).
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Source The Wealthy Boomer : Retirement
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