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Only 35% of working Canadians aged 50 and older can afford to retire

A new report by the National Institute on Ageing (NIA) reveals that only 35% of working Canadians aged 50 and older feel confident in their ability to retire comfortably. The study, conducted as part of a 10-year project, sheds light on the financial uncertainties faced by older Canadians as they contemplate retirement.

The research, published in a recent report, indicates that a significant portion of Canadians over 50 who plan to retire are grappling with financial concerns. Out of those surveyed, 35% expressed confidence in their ability to retire on schedule, while 39% cited financial constraints as a barrier to their retirement plans.

The report also highlighted that one in four respondents aged 50 and above admitted to feeling unsure about their financial readiness for retirement. Keith Neuman, one of the study authors and the executive director of the Environics Institute, emphasized that these uncertainties stem from various factors, including changes in workplace pensions and evolving income sources.

Neuman noted that while the study focused on those aged 50 and older, the financial challenges discussed are not exclusive to this demographic. He explained, “Of course, saving for retirement and being prepared for that is a bit of an unknown and a bit of a challenge because … the availability of workplace pensions and other sources of income have changed over the past few decades.”

Retirement preferences also played a role in the findings, with Neuman pointing out that not every Canadian plans to retire. “There’s a certain proportion of older Canadians who don’t plan to retire, who don’t want to retire. Not everybody does,” he said. However, among those who have retired, there is a positive sentiment, as they tend to find retirement more enjoyable than anticipated.

Natalie Iciaszczyk, another study author and the research program manager at the National Institute on Ageing, underscored the financial wellbeing of older Canadians. According to the report, the majority of surveyed individuals stated that their household income is "enough" for them. However, only 33% felt they had enough income to save, while 39% mentioned their income is just sufficient for their day-to-day needs, raising concerns about their ability to save for the future.

The report is part of a decade-long project, and Iciaszczyk hopes that future surveys will provide insights into whether these financial challenges persist over time. She stated, “Hopefully in the next three to four to five years we’ll be able to tell if these numbers and proportions are staying consistent, (whether) they are increasing as a greater share of our population does enter 65 and older.”

Despite the passage of time since the initial survey in 2022, the report revealed that retirement readiness levels have remained largely unchanged. Neuman emphasized, “As people get older, in many ways, their outlook is looking better, but this retirement readiness issue persists, to some extent, even across older age groups.” The challenges highlighted in the report underscore the need for ongoing attention to the financial preparedness of Canadians as they approach their retirement years.