Rosalind Evans
Retirement, once a hallmark of reaching a certain age and financial stability, is increasingly becoming an elusive dream for many Canadians. Despite a recent ease in inflation, a significant number of Canadians, particularly those over 50, feel unprepared for retirement, according to a new report by Toronto Metropolitan University’s National Institute on Ageing. The report highlights a concerning trend: only 35% of Canadians over 50 feel financially ready to retire. This sentiment is further compounded by the fact that 39% do not feel prepared, and 26% are unsure of their financial readiness to retire.
Natalie Iciaszczyk, the research program manager at the National Institute on Ageing, sheds light on the situation, stating, “Inflation has made it harder for Canadians who are still working to get by, and that makes it harder for them to be able to set money aside for the future.” This statement underscores the harsh reality many face as the cost of living rises, eroding the ability to save for retirement. Lianne Di Rocco, a portfolio manager at BMO Nesbitt Burns, echoes this sentiment, highlighting that personal wealth is “depleting” faster due to the increased responsibility on individuals to save for their retirement, as opposed to relying on company-sponsored pension plans or adequate government support.
The report also draws attention to the impact of rising healthcare costs and the need for long-term care, which are not traditionally factored into retirement planning but are becoming increasingly significant. These costs add another complexity to retirement planning, mainly as Canadians live longer and face health complications later in life.
Di Rocco emphasizes the importance of planning for multiple financial and health scenarios to mitigate the risks associated with aging and the potential for out-of-pocket healthcare costs. She suggests that financial planners should model various scenarios, including the potential need for a caretaker, to prepare their clients for retirement better.
The findings from the NIA report and insights from experts like Iciaszczyk and Di Rocco highlight a pressing issue: retirement is no longer a guaranteed phase of life but rather a financial challenge that many Canadians are struggling to meet. As the cost of living continues to rise and the economic landscape evolves, individuals and policymakers must recognize and address the retirement gap facing Canada’s aging population.
The dream of a comfortable retirement is becoming increasingly out of reach for many Canadians. The challenges posed by rising living costs, inadequate savings, and unforeseen healthcare expenses necessitate reevaluating retirement planning strategies. Both individuals and the government must take proactive steps to ensure that retirement remains a viable and attainable goal for all Canadians.
