Job Termination
Retiring on easy street a pipe dreamTwo-thirds of Canadians in their early to mid-40s will have trouble making even basic ends meet in retirement unless they either up their savings rates or keep working beyond age 65, according to a study released earlier this month. COLIN PERKEL |
|
 [ 2007-06-27 ] |
© 2007 Jupiterimages Corporation
Two-thirds of Canadians in their early to mid-40s will have trouble making even basic ends meet in retirement unless they either up their savings rates or keep working beyond age 65, according to a study released earlier this month.
The University of Waterloo findings are in stark contrast to a recent opinion poll that suggested more than half of Canadians aged 40 or older are confident they will be able to retire comfortably.
Instead, the new study finds only one in three Canadians who expect to retire in 2030 are saving at levels required to meet even basic expenses.
"We found a disconnect between what we see when we do surveys as to the retirement expectations of Canadians today, and what the contribution rates are that are needed to buy that level of income security," said Rob Brown, a professor of actuarial science at the university.
"CHANGE THEIR WAYS"
"Either they have to change their ways immediately -- if not yesterday -- or they have to change their expectations around when and how they're going to live in retirement."
Brown said Canadians have to realize that life expectancy is increasing, while interest rates that are so important in providing retirement annuities are relatively low.
"I don't think there's been any shift in the mindset of workers around those two realities," Brown said. "They both work against retirement income security."
Comfortable retirement appears to hinge on a diversification of savings vehicles. That means combining home equity, company- sponsored pension plans, registered retirement savings plans and personal savings to supplement government payouts such as old age security and the Canada pension plans.
Which résumé faux pas have you been guilty of?