5 key risks to retirement income

By Staff | June 24, 2015 | Last updated on June 24, 2015
1 min read

Inflation is the single biggest risk for retirees, with 58% of pre-retirees and 45% of retirees worried about the potential for rising prices to erode purchasing power, finds a Fidelity Investment survey.

“Inflation hurts retirees more than any other group,” says Peter Drake, vice-president, retirement and economic research, Fidelity Investments Canada. “In retirement, you have to plan for inflation because it can do a lot of damage over the long term.”

Read: Help clients nearing retirement

Additional risks include:

  • healthcare (53% of pre-retirees are concerned vs. 42% of retirees);
  • asset allocation (46% of pre-retirees vs. 31% of retirees);
  • running out of money (46% vs. 30%); and
  • longevity (49% vs. 33%).

The survey also found that 62% of pre-retirees expect to continue working in retirement, and 54% of those that work do so for financial reasons. Meanwhile, 27% of retirees are currently working at least part-time.

Read: The true cost of retirement

Still, 85% of retirees have a positive outlook on retirement.

Drake cites three key observations on retirement from the last decade.

1. Working in retirement is not a retirement plan.

2. Inflation is a risk to retirement income.

3. Financial advisor is key to retirement fulfillment.

Read more from the survey.

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.