Lack of savings could delay retirement indefinitely, study finds

Canadian investors approaching retirement need to put more money aside, says Schroders’s 2017 Global Investors Study .

Even though currently retired respondents from Canada said they stopped working at the age they wanted to—at age 59, on average—the majority (58%) added they wished they had saved more. Also, those who hadn’t yet retired said they should be saving 13.1% of their annual incomes, but that that they’re only putting 11.2% away.

If investors fail to bump up their savings, they’ll have to work longer. As the study says, respondents yet to retire now expect to quit working at age 63. What’s more, 13% don’t expect to ever fully retire.

Retirement income sources and goals

For Canada, the study finds people’s main sources of income after they stop working are savings and investments (24.1%), company pensions (23%) and personal pensions (13%).

With that money, the study adds, they most enjoy having more leisure time (74%) and spending more time with family and loved ones (53%). Canadians who haven’t yet retired also hope to enjoy those two activities (60% and 51%, respectively).

The top three reasons to invest, for both sets of respondents, is to supplement or grow pension savings (76%), supplement current salary or income (58%), and to help pay for healthcare expenses (57%).

For more Canadian results, click here.

Global study results

These are some of the study’s main findings:

• The average age that today’s retirees wanted to stop working was 61, and age 59 is when they did retire.
• 66% wish they had saved more.
• Across the globe, the top-five sources of actual and expected income are savings and investments (20%), state pension (19%), company pension (18%), personal pension (12%) and income from property, such as rental income (7%).
• With all global respondents taken into account, 16% of pre-retirees don’t expect to retire, while 7% intend to work part-time and never retire.
• The full list of retirement goals also includes activities such as turning hobbies into a source of income, volunteering, working part-time and doing nothing.

To read the full study, click here.

Survey methodology: Schroders commissioned Research Plus Ltd to conduct an independent online study of 22,100 investors in 30 countries around the world, including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, UAE, the UK and the U.S. The study was done between June 1 and 30, 2017, and it defined “investors” as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.

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