Here’s the bad news: the after-effects of the global economic downturn will be felt by millions of retirees for decades to come, finds a new HSBC report.
In Canada, however, only 18% of its retirees say their ability to save was hampered over the last few years retirement, according to HSBC. On average, 26% of retirees said the same in other countries.
Yet, the survey also finds many Canadians (40%) still say they’re somewhat unprepared for retirement. That compares to the global average of 35%.
In fact, “the global economy picked up in 2014, [but] only 24% of Canadians surveyed have been able to save more for retirement this past year than in the previous year—that’s well below the global average of 40%,” says Betty Miao, executive vice-president, and head of Retail Banking and Wealth Management, at HSBC Bank Canada.
She adds, “It may be that “Canadians [aren’t] feeling the tailwinds of the economic downturn as much […] because the chill of too much debt and [the] high cost of living is taking precedence.”
The majority surveyed (52%) say paying off their mortgage and other debts are stopping them saving for retirement, and 33% admit they’re less able to save money today than they were in 2014, compared to the global average of 27%.
Canadians are also bucking trends when it comes to how they plan to pull in extra retirement income. More than two-thirds (39%) plan to fund their retirement in part through investment properties, but that’s below the global average of 65%.
However, HSBC says retirees in Asia are the most likely to help fund their retirement in less traditional ways. For instance, 73% of Malaysians already own or plan to invest in jewellery, diamonds and gold, and retirees in Indonesia (35%) and India (28%) are looking at cashing in on classic cars.
Survey highlights & tips
- Retirement may seem a long way off when clients are young, but 40% of today’s retirees say saving earlier would have improved their current standards of living.
- Today, Canadians are enjoying 24 years of retirement, on average. Unfortunately, many are only able to maintain their desired lifestyles for 10 years. So help clients think ahead, and then help them keep spending in check. Read: Seniors worried their savings won’t last
- Nearly one in five working-age respondents (19%) say illness or accidents have prevented them or their spouse from working as long as needed. So help clients plan for disability and incapacity, and discuss how that may affect their retirement planning and needs. Read: Dementia puts families, advisors at risk