TORONTO, April 26, 2010 — Four-in-ten Canadians (39 per cent) over the age of 50, who have assets of at least $100,000, retired with some form of debt and one-quarter (22 per cent) entered retirement with a mortgage on their primary residence, according to the first annual RBC Retirement Myths and Realities poll, which examines Canadians' expectations and experiences in retirement.
The majority of retirees (70 per cent) feel it is still important to be able to save part of their income, yet more than one-quarter (28 per cent) have acquired new credit products since they retired.
"More and more, Canadians are carrying debt into retirement, which is not necessarily a bad thing," said Lee Anne Davies, head, Retirement Strategies, RBC. "Having access to credit in retirement can be beneficial to managing income and cash flow and provide additional flexibility. To help make your retirement dreams a reality, our advice is to start early and prepare a comprehensive financial action plan that will keep you focused on paying down debt and saving, as well as establishing a budget for both your pre- and post-retirement years."
Inflation and taxes are among the top concerns for retirees, with more than one-third (35 per cent) worried that inflation will negatively impact their retirement income, compared to 43 per cent of pre-retirees. Six-in-ten (62 per cent) retirees worry about taxes on their income, with two-thirds (66 per cent) believing the percentage of their income required for taxes will rise in the next 10 years. Retirees say they are currently living on 56 per cent of their pre-retirement income, indicating that spending drops significantly in retirement.
"It's not uncommon to be concerned about maintaining a sustainable level of income in retirement, but costs you never counted on may also arise," added Davies. "For example, our poll found that almost one-in-five retirees spend over $1,000 annually on prescription drugs. Working with a qualified advisor can help you prepare for taxes, inflation and unexpected costs that may impact your retirement goals."
These are some of the findings the RBC Retirement Myths & Realities poll conducted by Ipsos Reid from March 10 -19, 2010. For this survey, a national sample of 2,143 adults aged 50 and over with household assets of at least $100,000 from Ipsos' Canadian online panel was interviewed online. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of ±2.1 percentage points 19 times out of 20 of what the results would have been had the entire population of adults in Canada been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
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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Suzanne Willers, RBC, 416-974-2727
Cyndi Maisonneuve, RBC, 416-974-1757