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Special Reports

 

Retirees unaware of how much money they spent during first year of retirement, according to RBC poll

TORONTO, February 4, 2009 — According to the 19th Annual RBC RRSP Poll, three- in-four retired Canadians (76 per cent) are unaware of how much money they spent in their first year of retirement. Of those who are aware, almost half (46 per cent) say it was more than expected, 12 per cent say it was less and 42 per cent say they didn't have any expectations.

"Before retiring it's important to be aware of how much money you think you'll spend once you've retired," said Lee Anne Davies, head, Advanced Retirement Strategies, RBC. "Take the time to get an idea of what your day-to-day expenses are. This way, you'll also have more time to make adjustments in your investment strategy - to ensure that your nest-egg can provide the retirement lifestyle you've been planning for."

Not only are the majority of Canadians unaware of how much they spent in their first year of retirement, the study found that over one-third (39 per cent) of retired Canadians encountered costs they did not anticipate in retirement. Of those, almost half (45 per cent) encountered unanticipated home repairs or maintenance costs, 42 per cent experienced unplanned healthcare costs and 36 per cent experienced unintended vehicle repair costs.

When retired Canadians were asked about spending in the first three years of retirement, three-quarters (75 per cent) say they made large purchases. Forty-one per cent said they spent money on a trip, 38 per cent bought a car and 37 per cent made home improvements.

"When it comes to retirement planning, professional advice has never been more important than it is today," said Davies. "Successful planning takes discipline, knowledge and experience. It's key to ensuring your retirement dreams won't be sidetracked by unforeseen costs or large purchases."

According to the poll, day-to-day living expenses make up the majority (58 per cent) of annual spending for retirees, followed by health care (10 per cent), treating themselves (nine percent), supporting their family (eight per cent) and treating their family (eight per cent). Pre-retirees, on the other hand, believe that 47 per cent of their annual spending in retirement will be allocated towards day-to-day living expenses,
12 per cent for health care, 14 per cent for treating themselves, 10 per cent for supporting their family and 10 percent for treating their family.

About the 19th Annual RBC RRSP Poll
The 19th Annual RBC RRSP Poll was conducted by Ipsos Reid from October 16 to 23, 2008. This online survey of 1,272 Canadians was conducted via the Ipsos I-Say Online Panel, Ipsos Reid's national online panel. The results of this poll are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. Statistical margins of error are not applicable to online polls, however, an unweighted probability sample of this size, with a 100 per cent response rate, would have an estimated margin of error of ± 2.7 percentage points, 19 times out of 20, had the entire adult population of Canada been polled.

Your Future by Design® is RBC's distinctive approach to help clients identify, plan, and realize their goals for retirement. With the guidance of RBC financial planners and investment and retirement planners, Your Future by Design helps clients create a blueprint for a successful lifestyle and financial plan for retirement based on what is truly important to them in key areas in life, including family, health, home, lifestyle, work/business, mind and spirit, and legacy. To find out more about how RBC can help build a blueprint for the future, visit www.rbc.com/yourfuture or call 1-866-335-4055.

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Media contacts:
Sarah Pendrith, RBC Wealth Management, 416-974-8820
Jackie Braden, Media Relations, 416-974-2124


 

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02/04/2009 14:21:20