December 6, 2019

The “Unretirement Index” From Sun Life

By Nigel Aplin | Feb 24, 2014

Sun Life has sponsored an annual survey over the past few years which asks Canadian workers about their attitudes toward retirement.  This year’s survey was conducted by Ipsos Reid late last year and included online interviews with more than 3,000 Canadian workers.

The key question in the survey is “Will you be working at age 66?” The answer to that key question fundamentally changed as a result of the financial crisis of 2008/2009 but this year’s responses were similar to last year’s.  28% of survey respondents said that they would be fully retired by age 66, 27% said that they would be working full time at that point, 29 said that they would be working part time, 15% did not know the answer and, interestingly, 2% thought that they would no longer be living by age 66. The 2009 survey results, compiled perhaps before the full impact of the financial crisis was felt, were much different as 55% of respondents that year said that they would be fully retired by age 66 and only 16% thought that they would be still be working full time.

Of those who say that they will still be working at 66, a clear majority will be doing so out of necessity as 65% said that they would still be working because they have to while only 35% will be working because they want to.

The survey’s connection to the housing and mortgage industries revolves around the questions of whether to focus on paying down mortgages or saving for retirement and to what extent Canadians intend to rely on their home equity as a source of retirement income. This year, when asked about the choice between paying down their mortgage and saving for retirement, a clear majority of 57% said that they would choose paying down the mortgage and 42% said that they would choose the saving for retirement option.  When asked about their top financial priority, the most popular answer was “paying down debt” which may explain why a majority of respondents said they would choose to pay down their mortgage rather than save for retirement.

Related to that question is the question about whether home equity will be the primary source of retirement income.  24% of respondents said that it would be and 59% said that it would not be. A further 17% were not sure. A quarter of Canadians, according to the survey, will be relying on a single asset class – their homes and they equity they have built in them – to fund their retirement. Since most financial planners emphasize that a diversified approach to investing and retirement saving is more prudent than being “over-weighted” in a single asset class, some Canadians may be in for an unpleasant surprise if home values were to fall as they approach or are already in their golden years.

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