Canadians don’t understand CPP, OAS

While Canadians appear optimistic about their retirement lifestyle, few have a firm handle on what their cost of living will be and what their pensions will offer, shows a survey by Investors Group.

More than two-thirds (69%) of people near retirement are unaware of what the maximum monthly payout is for CPP, Quebec Pension Plan and Old Age Security, yet more than 80% of them say they plan to use these programs as a source of retirement income, and more than 33% anticipate this will be their primary source.

Read: Be a registered savings whiz

Income sources Employer pension will be a source of income for 60% of those surveyed, and 37% say it will be their primary income source. However, of those who say they have workplace pensions and plan to rely on it as their primary source of income, 55% didn’t know the monthly benefit they could expect.

Cost of living Seven-in-10 say they’ll have enough to pay the cost of living in retirement, yet 42% of people pre-retirement didn’t have an estimate of expenses. The situation doesn’t improve for those closer to retirement: 39% of those aged 55-64 are still unclear on what to expect.

Read: Are Gen X and Y too confident about finance?

Retirement Confidence Nearly three-quarters (72%) of pre-retirement individuals are confident they’ll be able to maintain their current lifestyle in retirement. This number jumps to 91% among those working with a financial advisor.

While 39% of those surveyed say their confidence in their own money management has gone up over the last 10 years, 58% say their confidence in younger generations’ ability to save adequately for retirement has gone down.

In addition, 66% of Canadians are less confident in governments’ ability to continue to provide an acceptable level of pension and retirement benefits.

Read: 5 RRSP tips from Golombek

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.