For years, the general consensus around retirement has been that people haven’t saved enough money, don’t have enough to live on and are scared about their golden years. Well, a new survey by Russell Investments and Harris/Decima says retirees are doing just fine.

The survey, which was released Tuesday, says 88% of retirees consider their financial health to be good, very good or excellent. “Conventional wisdom says there would be all these challenges, but when you look around into your own families, you don’t see the struggles that you think are going to happen,” says Irshaad Ahmad, Russell’s president and managing director. “When you do some research, you find a remarkable difference than what people are expecting — in a really positive way.”

The perception that seniors are, or will be, financially strapped in retirement is partly due to the fear of the unknown. There is a plethora of confusing figures related to how much a person needs to save, and most people who haven’t worked out their finances or met with a financial planner have no idea how much money they’ll need in retirement.

Cynthia Kett, a CFP with Toronto-based Stewart & Kett Financial Advisors, says her new clients are always concerned about their retirement savings when they come see her for the first time, but the right discussion helps calm them down. “Planning puts my client’s mind at ease,” she says. “Whether the results are positive, ‘yes you can spend as much as you’re spending now,’ or ‘no, you won’t be able to do that without additional savings,’ then at least they know what’s in store now so they can deal with it.”

Based on the report’s data, Ahmad says 40% of Canadians don’t have an advisor, but of the retirees who do, four out of five expressed satisfaction with their financial health. Three out of five people who don’t have a planner reported the same thing.

The survey also found that seniors need only 60% of their pre-retirement income to live a fulfilling life. The accepted number is somewhere around 80%. Ahmad explains that if younger clients look at what they’re spending now for basic necessities, there’s no way they’ll be using 60% of their income.

“I’m in my early 40s, and when I think about the percentage I live on, it’s nowhere near that much,” he says. “After a client retires, they hopefully have the mortgage paid off, they’re mostly free of the kids, so expenses drop. They can live on 60% of their pre-retirement income, because that’s more than they lived on their whole life.”

But Kett says most of her clients use 100% of their pre-retirement income, if not more, for their post-working lifestyle.

She says most have become accustomed to their daily routine, and they want to maintain it. “They tend to be travellers, and they travel well, and they also like to spend time entertaining and doing things with their children,” Kett explains.

To spend 100% of pre-retirement income, clients need to have accumulated enough investment capital or pension benefits. Of course, it helps if a client has a financial planner to figure out just how to reach this income replacement goal.

Ahmad says post-retirement income can also come from investments. He explains that for every dollar a client takes out of an investment after retirement, 10 cents comes from the contribution, 30 cents from the pre-retirement investment returns and 60 cents from the post-retirement investment returns. “Think about that in an investment journey when retirement isn’t even halfway over,” he says. “A lot of replacement you generate will come from returns after retirement.”

Overall, Ahmad says the news for retirees is “mostly good,” but planning for the future is paramount. Advisors need to work with their clients to figure out when the mortgage should be paid off and how they’ll be able to come up with enough money to live comfortably in retirement. “It doesn’t necessarily mean you need to start saving,” he says. “What this survey is saying is the use of financial advisors improves how a client will feel about this journey.”

Filed by Bryan Borzykowski,,