Canadians won’t meet retirement goals

Canadians are living longer and many aren’t financially prepared.

So says BlackRock Asset Management Canada Limited’s Canadian Investor Survey. It finds that while 56% of investors believe their savings will need to last at least 25 years in retirement, many lack a plan.

Read: The new retirement math

Further, only 15% of non-retired investors know how much they need to save each year to meet their retirement goals.

“There tends to be a false sense of security when it comes to planning for retirement,” says Noel Archard, head of BlackRock Canada. “We hope that the money will somehow be there when we need it but we’re not taking the action required to ensure it is.”

Read: Understanding DB pension plan contributions

Additional findings include:

• 70% believe government pension plans will be there for them in retirement;
• 61% with a defined contribution plan or group RSP take an active role in understanding their workplace retirement plans—59% usually contribute the maximum allowed every month, but 70% admit they hardly ever, or never, adjust their allocations;
• 46% have chosen to invest less in the stock market in the last few years, and a third admit they missed out on the post-2009 market rally;
• 43% see a need to diversify out of Canadian holdings, while 34% are looking to increase their holdings in Canadian equities;
• 18% don’t save anything for retirement on a monthly basis; and
• The biggest barrier to saving more is “making ends meet month-to-month” (59%), but 40% also cite “a decrease in salary” or the cost of education (44%).

Read: Are your retired clients carrying debt?

“What this survey shows is the urgent need for all parties—government, employers, investment advisors and industry participants like u—to do a better job of helping prepare Canadians for retirement so that their ever-growing golden years will be a time of happiness and contentment and not one of need and worry,” says Archard.

Read: Lifelong planning is your goal

Playing it safe will not help investors achieve their investment goals. BlackRock Canada suggests Canadians take the following steps:

• Take full advantage of your workplace retirement plans; and
• Reduce home market bias in your portfolio by looking for diversification outside of our borders.

Also read:

Redefining retirement planning

Inflation-proof retirement plans

Chances of retirees running out of money more than 50%