Retirement reset: pandemic impacts retirement plans, timing and savings goals, RBC poll finds

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TORONTO, Aug. 27, 2021 /CNW/ – The pandemic has Canadians rethinking what their retirement could look like, when they will be able to retire, and how much they will now need to save to do so, according to not-yet-retired Canadians aged 50+ surveyed by the 2021 RBC Retirement Myths & Realities Poll.

The most immediate impact is that the pandemic has caused some Canadians to hit the pause button on their retirement date. Eighteen per cent of respondents say they’ll now be retiring later than expected, with that response highest in Alberta (33%).

Source: RBC 2021 Retirement Myths & Realities Poll (CNW Group/RBC Royal Bank)
Source: RBC 2021 Retirement Myths & Realities Poll (CNW Group/RBC Royal Bank)

“If you’re nearing retirement without a formal plan, there’s a shrinking window of opportunity to review your options.”Tweet this

Concerns around outliving retirement savings have reached their highest level in a decade, as 21% of respondents with more than $100,000 in investable assets now expect to outlast their savings by 10 years (compared to 16% in 2010), with the highest percentage reported in Quebec (27%).

Compounding what respondents are facing over the near-term is the fact that half (50%) do not yet have a financial plan, and only 20% have created a formal plan with an advisor or financial planner.

“If you’re nearing retirement without a formal plan, there’s a shrinking window of opportunity to review your options, to see if you can enjoy the retirement lifestyle you’re hoping for,” explains Rick Lowes, Vice-President Strategy, RBC. “An advisor can help you translate your personal goals into financial ones and explore strategies to achieve them. Also, RBC’s MyAdvisor gives our clients the ability to use interactive scenario planning, to see the potential impact of today’s financial decisions on tomorrow’s projected outcomes.”

Poll respondents also indicated the pandemic has prompted them to either think about, or take action on, a number of retirement-related issues, including:

  • Thinking more about where they will live in retirement (22%)
  • Deciding where they do not want to live (20% do not want to live in a retirement home)
  • Reviewing and updating wills and beneficiaries (15%)
  • Taking stock of their financial affairs (17%)
  • Taking up a new career or hobby, realizing ‘life is short’ (16%)

Canadians approaching retirement have also been resetting their retirement savings goals. Those with more than $100,000 in investable assets now estimate they will need to save $1 million on average – approximately $50,000 more than in 2019 – with over three-quarters falling short of their goal by almost $300,000 on average. Meanwhile, those with less than $100,000 in investable assets have lowered their retirement savings goal – now sitting at $533,153 (vs. $574,354 in 2019) – but they have a much larger savings gap of $472,991.

To help bridge a shortfall during retirement, both of these groups responded that they would:

  • Stay in their current home and live more frugally (37% of those with >$100K; 36% of those with <$100K)
  • Return to paid work (31% and 36% respectively)
  • Downsize/move (31% and 23% respectively)
  • Ask a family member for assistance (lowest on their list of options, at 3% and 5% respectively)

“We know from past polls that retirees will find a way to make their finances work, but this may mean they aren’t leading the lives they were hoping for when they retire,” notes Lowes. “We’re here to help Canadians so they can focus on what truly matters to them.”

Being able to find and follow a passion as a retiree is the focus of RBC’s new Second Act video series, which highlights what can be accomplished beyond a first career, particularly if a retiree has a plan. For those who may feel their retirement dreams are out of reach, the series has a key piece of advice: Don’t give up on what you really want to do in retirement.

More information about the comprehensive resources RBC provides to support Canadians as they transition into and live in retirement is available in Retirement Planning.

Fast Facts – RBC 2021 Retirement Myths & Realities Poll

Selected National, Regional, Gender Findings: Non-Retired Canadians aged 50+

RESPONSECANADABCABONQCMALEFEMALE
Will delay retirement18%20%33%16%9%15%20%
Will outlive savings for retirement by 10 years (among those with $100K investable assets)21%21%20%*19%27%20%23%
Thinking more about/acting on… where I will live in retirement22%29%28%20%23%23%21%
Thinking about/acting on… not living in a retirement home20%30%19%18%18%20%20%
Thinking about/acting on… reviewing/updating wills and beneficiaries15%17%13%18%12%15%14%
Thinking about/acting on… taking stock of my financial affairs17%28%23%20%14%18%16%
Thinking about/acting on… taking up a new career or hobby16%15%9%24%4%15%16%
* Small base size. Findings for SK/MB and AC also not included due to small base sizes.

Investable Assets Findings: Non-Retired Canadians aged 50+

RESPONSE>$100K investable assets<$100K investable assets
Retirement savings goal$1,000,670$533,153
Amount already saved for retirement$703,058$60,163
Retirement savings goal deficit~$300,000
[-$297,612]
~$470,000
[-$472,991]
If I need more $ in retirement… I would return to paid work31%36%
If I need more $ in retirement… I would stay in my current home, live frugally37%36%
If I need more $ in retirement… I would move (downsize; rent not own, etc.)31%23%
If I need more $ in retirement … I would cash in some investments55%16%
If I need more $ in retirement … I would borrow against my home equity13%6%
If I need more $ in retirement … I would ask a family member for help3%5%

About the RBC 2021 Retirement Myths & Realities Poll
These are the findings of the most recent biennial RBC Retirement Myths & Realities Poll, conducted by Ipsos between May 21 and June 1, 2021. For the overall survey, a sample of 2,200 Canadians aged 50+ was interviewed via the Ipsos I-Say panel and non-panel sources, of whom 1,100 are pre-retirement. Quotas and weighting were applied to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. For this release, the data referenced is among a sample of 1,100 aged 50+ who are pre-retirees. The credibility of Ipsos online polls is measured using a credibility interval. In this case the results are considered accurate to within ±2.6 percentage points, 19 times out of 20, for the full sample of retired and pre-retired Canadians aged 50+, and ±3.4 percentage points, 19 times out of 20, for the sample of pre-retired Canadians aged 50+.

About Retirement Planning at RBC
The RBC Retirement Planning hub can help you plan for the 30 years or more you may spend in retirement. This website also includes links to Financial Planners/Investment & Retirement Planners who can help you help you determine the retirement lifestyle you hope to live, the sources of income you’ll be able to draw from when you retire and considerations to make before applying for your CPP/QPP. Wherever you are on your retirement journey, we’re here to help you take the next step. Are you saving and planning? We’ll help you uncover the things you may not have thought of yet and discover ways to make the most out of your personal situation. Are you getting close to retirement? We’ll make sure you’ve covered off the important stuff and dare to dream about the possibilities. And if you’re already retired, we’ll show you how to preserve and grow your hard-earned retirement savings to enjoy the journey ahead. For more information, please visit Retirement Planning.

About MyAdvisor at RBC
As of July 2021, over 2.7 million Canadians – including more than 1 million Canadians aged 50+ – now have a personalized plan for their finances through MyAdvisor, only available at RBC. This free digital platform offers RBC clients a hybrid approach, so clients can access the best of both worlds – human and digital. MyAdvisor provides clients with real time, any time digital access on interactive screens to a comprehensive view of their finances, including a personalized plan, cash flow, and goals. Clients can make informed financial decisions with interactive scenario planning that helps them see the potential impact of today’s financial decisions on tomorrow’s projected outcomes. MyAdvisor makes it more convenient for clients to connect to an RBC advisor in their community for the advice they need when they need it, via live video, phone or in-branch. Introduced in 2017, MyAdvisor is one of the key ways RBC is delivering advice through digital channels. More information can be found here.

About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 88,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada’s biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.‎

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.

SOURCE RBC Royal Bank

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