37% of boomers question if they have enough savings

It’s no secret that today’s retirees are likely to live longer — they could spend up to 30 years in retirement. That means you need to help them plan for any extra expenses and health issues.

Read: Make way for centenarians

Indeed, the top three concerns of Canadian boomers (those aged 55 and up) are related to longevity. An RBC retirement poll finds this segment is worried about maintaining their standard of living (39%), having enough savings (37%) and covering healthcare costs (34%).

But there’s a problem. Despite acknowledging these concerns, only one third of poll respondents (33%) say they plan to review and adjust their retirement lifestyle plans to ensure they’re on track. Almost half (46%) say they’re financially unprepared for retirement, compared to where they thought they would be.

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Recent studies have suggested many Canadians aren’t contributing enough to RRSPs and TFSAs. Trends data from Statistics Canada shows that, between 2000 and 2013, the number of contributors to RRSPs declined gradually by approximately 16% — when looking at contributors between the ages of 25 and 54.

The fall in contributors correlates with poor economic performance and the availability of the TFSA as an alternative. StatsCan says, “Two of the largest annual declines occurred from 2007 to 2008 (2.8%) and from 2008 to 2009 (4.4%), which coincided with both the economic recession in 2008/2009 and the introduction of TFSAs in 2009.”

TFSAs may be elbowing out the RRSP, given the StatsCan study shows “an increase in the number of individuals aged 25 to 54 who contributed to a TFSA, from 2 million in 2009 to 3 million in 2013.” But more people in that age bracket were also withdrawing from TFSAs during that period, despite the looming reality of retirement.

Read: Clients want to shoot for the moon but don’t have financial plans

A recent two-part study from BMO uncovers similar issues. The survey, conducted in December 2016, finds only 46% of Canadians plan to contribute to RRSPs this year. Plus, part two of the survey reveals that 38% of Canadians have withdrawn RRSP funds this year, before age 71 — an increase of 4% from last year.

Most early withdrawals are made to buy a home, says BMO, but some contributors also use the funds to pay for living expenses (21%), debt (18%) or emergencies (18%).

Read: Many Canadians withdrawing RRSP funds for daily expenses

Bill Hill, national retirement planning consultant for RBC, warns in a release that people’s priorities often shift as they enter retirement, so it’s best to review these questions with clients at that point. “Retirement plans need to be fluid,” he says.

Ipsos conducted the survey for RBC, polling 2,033 adult Canadians online from November 25 to 30, 2016.

RBC poll highlights

Top questions on the minds of boomers

Will I have enough money in retirement (46%)
How do I make the most of the money I have saved (26%)
How will I deal with inflation in retirement (20%)
What lifestyle changes should I expect in retirement (19%)
How will I manage debt in retirement/How will I earn income while I’m retired (15%)
Should I downsize/sell my home (13%)

Top activities of retired Canadians