Watch the ‘Words of wisdom from today’s retirees’ video, and read the full article below.
Knowing what it’s like to be retired and planning for retirement are two very different things. This is supported by the survey results in the 2016 Sun Life Retirement Now Report. The survey, which replaces the Sun Life Canadian Unretirement Index, asked retirees about their present circumstances and working people about their plans for the future.
The findings in the Retirement Now Special Report1 provide you with a balanced, insightful view of the evolving state of retirement in Canada that is specifically focused on those with $100K to $500K of investable assets (also defined as mid-market). This can help you understand how working Canadians and retirees feel about retirement so you can connect and deepen relationships with your clients and grow your business in the retirement market.
Check out the
Retirement now special report highlights
Here’s what we found out about mid-market Canadians:
Working with an advisor boosts confidence
The research shows that working with an advisor makes Canadians feel more confident in their ability to cover basic living expenses in retirement and do the things they want to do — all while living comfortably. In general, they say they feel more confident their money will last when working with an expert.
When it comes to the mid-market, 50% of working Canadians and 63% of retirees work with a financial advisor. Of those, 68% of working Canadians and 76% of retirees are satisfied with their retirement savings. On the other hand, of those who don’t work with an advisor, 57% of working Canadians and 68% of retirees are satisfied with their retirement savings.
Ultimately those with an advisor are happy with the advice they’re receiveing, since 88% of working Canadians and 93% of Canadian retirees rate the value of advice provided by their advisor as “good” or "very good.”
Despite all this, just 33% of mid-market workers and 35% of mid-market retirees have a written financial plan. These Canadians represent a significant opportunity for you as an advisor.
Personal savings are becoming more important
Over the years, employee pension plans have shifted from Defined Benefit2 (DB) to Defined Contribution3 (DC) plans; only 36% of mid-market working Canadians have access to DB plans. With DC plans on the rise, they’ll need to rely more on their own contributions to their workplace plans and their personal savings to fund their retirement. In fact, they say 30% of their retirement income will come from their personal savings.
Retirement expectations are changing
Many working Canadians (70%) are expecting to work past the traditional retirement age of 65, either full or part time. A phased approach to retirement is emerging. This could be for many reasons, including the desire to keep working to stay mentally active, like 50% of respondents who still expect to be working. On the other hand, of those who still expect to be working, 54% say they need to work longer to earn enough money to live well and 46% don’t believe government pension benefits will be enough to live on.
Although working Canadians are planning to work past age 65, it might not be an option; their health may dictate when they retire. The actuality of when and why retirement begins is telling. Only 19% of current retirees are phasing their retirement, 39% say they finished their careers and retired as planned and 19% had to retire because of their own personal or medical reasons. Retiring earlier than expected means clients may save less money, dip into their savings early and potentially face health-care expenses earlier than planned.
Start the conversation
Use the Retirement Now Special Report insights to deepen your relationships with mid-market clients and grow your business in the retirement market. Take advantage of the resources on the Insight and thought leadership section of sunlife.ca/advisor to share with your clients:
- The Sun Life Financial Retirement Now Report executive summary
- The Retirement Now Special Report (mid-market data)
- The Retirement Now Special Report highlights (mid-market data)
- The Retirement Now video
To learn more about building your business in the retirement market, contact your Sun Life sales team:
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1 The online survey was conducted between December 15 and 23, 2015, surveying 2,004 working Canadians age 30 to 65, and 2,006 retired Canadians between the ages of 30 and 80. The study’s sample included 522 mid-market working Canadians and 590 mid-market retired Canadians (both of whom have between $100,000 and $500,000 in investable assets).
2 A defined benefit plan is a company pension plan in which the income received at retirement is predetermined and usually based on a formula involving your years of service and earnings.
3 A defined contribution plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis.