Living the high life: Women are more concerned about outliving their money than men: 51% worry about maintaining their current standard of living after retiring, versus only 9% for men. Getty Creative ImagesTORONTO, Ontario (Financial Post), February 12, 2008:
By Jonathan_Chevreau
Here’s something men and women can contemplate on Valentine's Day – men believe they will need 59% more money than women will in order to retire.
That’s one of several findings from the just-released TD Waterhouse 2008 RSP Investor poll. On average, Canadians think they’ll need to save $727,000 in order to retire comfortably but there was a big gender difference in opinion. Men guessed $848,000 or 59% more than the average $532,000 nest egg estimated by women.
While 29% of those over 50 worry about outliving their money, women are more concerned than men: 51% worry about maintaining their current standard of living after retiring, versus only 9% for men.
Apart from the gender gap in expectations, the poll found British Columbians feel they’ll need $923,000 while Quebecers felt they could get by on roughly half as much, or $486,000. Those under 34 believe they need $933,000; those between 50 and 69 feel they need just $477,000. Sixty-four per cent plan to retire by age 65.
And wouldn’t you know it, the bank finds Canadians are even less confident than usual that they will be able to retire comfortably. Last year at this time, 84% were “somewhat confident” they could obtain a decent retirement. But now only 73% are so sure – no doubt an effect generated by six months of shaky stock markets. (TNS Canada Facts surveyed more than 1,000 investors in December).
As is typical of RRSP surveys, there is good news and bad news. The good news is 87% of adult Canadians have an RRSP. The bad is that only 14% have a retirement plan and only 31% calculated how much they will need to retire.
TD Waterhouse senior vice president Patricia Lovett-Reid says investors should not confuse an RRSP with a retirement plan.
“A retirement plan helps people answer such questions as whether or not they plan to continue working, where they’ll be living, what their ongoing family responsibilities will be and what activities they’ll be pursuing with their leisure time,” says Lovett-Reid. “By understanding these key factors, people can then map out their income and expenses more accurately and create a personal retirement income plan.”
Even among the 50- to 69-year-old crowd that is nearing retirement, only 18% have a written retirement plan. With Canadians enjoying one of the highest life expectancies in the world, 55% of non-retirees believe they’ll need some professional assisted care at some point in their old age. But half of them aren’t sure they will be able to afford it.
According to Canadian Institutes of Health Research (CIHR), there will be 6.7 million Canadians over age 65 by 2021, and by 2031 a quarter of the population will be over 65.
For those who do realize their retirement dreams, TD paints a glowing picture of the active retiree. Some 85% of those polled plan to travel or take up a new hobby. About two thirds of them expect to spend time with their grandchildren and 44% expect they’ll be caring for their own aging parents.
The middle years of retirement may see expenses drop but both the early and late years may be expensive, TD says. The early years because of travel and other costly activities retirees now have the time to indulge in; the late years because of rising health-care costs.
Among those who were not confident about their retirement prospects, 66% cited their inability to save as their main obstacle.
Canadians expect to rely most on personal savings and RRSPs (80% of those polled) while half are counting on the Canada Pension Plan and Old Age Security. Those under 50 are less confident about the government pensions and believe more in savings and RRSPs.
© 2008 Canwest Interactive
