Keeping up with the changing face of retirement
Retirement planning is taking on a whole new perspective as today’s retirees live longer, work longer and are more active than ever before.
When Sun Life Financial was chartered in 1865, women and men had life expectancies of approximately 46 and 42 respectively. Today, those numbers have almost doubled to 83 and 79.
The trend will continue, according to the March 2012 edition of The Actuary, which reports that one-third of babies born in 2012 will reach their 100th birthday.
With people living longer and healthier lives, the face of retirement has been transformed. To get a clearer understanding of just how much it has changed, Sun Life has conducted an annual Canadian Unretirement Index survey since 2008.
Even since the survey was launched, things have changed dramatically. For example, in 2012 the number of Canadians expecting to be fully retired at 66 has declined by almost 50% in five years. In addition, a growing number of Canadians expect to work into their retirement years because they need to, not because they want to.
“The aftermath of the financial crisis of 2008 has had a lasting impact, with more Canadians expecting they will need to work longer as a result,” says Kevin Dougherty, president, Sun Life Financial Canada. “The dream of being able to afford a full retirement at age 66 is being replaced by the reality that many people expect to be working beyond the traditional retirement age.”
Given that Canadians are looking at 20 to 30 years in retirement or more, the need to engage in long-term saving and planning is more critical than ever.
However, Sun Life’s survey also indicated there is a sizable gap between what Canadians think they need for their retirement and what they have. On average, respondents estimate they will need an average income of $46,000 per year for retirement. Yet the average savings target is $385,687 in retirement savings (excluding their home and other property).
In addition, two out of five Canadians are worried they will outlive their savings. Despite these concerns over the future, only two out of 10 Canadians have a written financial plan.
“The good news is, it’s never too late to start,” says Brigitte Parent, senior vice-president, individual insurance and investments for Sun Life Financial, who works in Waterloo, Ont. “Ideally it’s best to start early and develop some discipline around planning. But even people well into their 50s can build plans that make sense for their retirement,” she says.
“It’s never about one product or strategy. The key is understanding what people want to achieve in retirement and building solutions that look after their life, health and wealth needs.”
Sun Life has 3,700 advisors and financial planning managers in 1,200 communities across Canada who are supported by a broad suite of products and solutions that can be
The good news is, it’s never too late to start [planning for retirement]
combined to build the ideal plan, Parent says. “We also continue to bring new solutions to Canadians to meet changing retirement needs.”
Accumulating assets is only part of the retirement picture, she says. “It’s also about making sure those assets are well protected in the event of unforeseen situations. Whatever the plan, it has to work over many years. At Sun Life, our advisors take an approach to retirement planning called Money for Life.”
Those who haven’t put their financial houses in order should take that first step and talk with an advisor, she says.
“Once they’ve broken the ice, they can start to get a clearer picture of what their retirement years will look like and what they need to do to achieve their goals.”