Schroders Global Investor Study Confirms Canadians Are Not Saving Enough for Retirement
TORONTO--(BUSINESS WIRE)--Jul 10, 2018--Schroders released their annual Global Investor Study, which found that Canadians are behind their global peers when it comes to retirement investing, and similar to investors across the globe, exhibit a wide gap between expectations and the financial realities of life in retirement.
Schroders’ study surveyed over 22,000 people from 30 countries 1, and found that Canadians save an average of 11.9% of their income specifically for retirement, less than The Americas average of 13.9% and the global average of 12.2%.
Additional key findings within the Canadian market revealed:The cost of retirement is vastly underestimated: To live comfortably in retirement, non-retired Canadians believe they should be saving an average of 13.6%, compared to 16.1% of The Americas and 14.4% globally. Twelve percent of Canadian retirees report not having enough income to live comfortably, which may be due to many of them underestimating the cost of living expenses in retirement. Canadian non-retirees expect to spend an average of 42% of their retirement income on basic living expenses 2. However, the reality for retirees is that they require 59%. Retirees need more income than expected: Canadians close to retirement (ages 55 and over) predicted they will need an average of 71% of their current salary or income to live comfortably in retirement, while in reality, retirees in Canada are receiving 61% of their final salary annually.
Lesley-Ann Morgan, Global Head of Retirement, Schroders, commented:
“Retirement savings are endangered globally, and Canadians are no exception as one of the countries saving even less than their global peers. It is important that expectations and preparation for retirement are based in reality. In the current environment of low returns and increasing inflation, underestimating the proportion of retirement income that will need to be allocated to basic living expenses and the amount of money they will need to live comfortably in retirement can be dangerous.”
To help Canadians work toward their unique retirement goals, Schroders recently launched the Schroder MyRetirement Funds, target date funds that were built upon extensive research of the Canadian market and exclusively designed for Canadians. Intended to be a lifelong investment solution, the Funds aim to address the specific challenges of each stage of an individual’s life, including delivering a predictable income stream in the retirement years. The Funds offer five-year vintages from 2015 through 2060, taking into account an individual’s age, lifespan, and income, as well as offering the ability to readjust accordingly.
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*as at 31 December 2017
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Lucy Cotter, +44 (0) 20 7658 3365
Katherine Segura, 646 650 5889
KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: WOMEN OTHER CONSUMER PROFESSIONAL SERVICES BANKING FINANCE CONSUMER MEN
SOURCE: Schroders plc
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PUB: 07/10/2018 10:18 AM/DISC: 07/10/2018 10:18 AM