Pre-retirees relying on homes to fund retirement

Many Ontarians are overestimating their ability to finance their retirement using their homes, according to a study by the OSC. In fact, 45% of pre-retired Ontario homeowners are relying on the value of their home increasing to fund their retirement.

Further, homeowners without any retirement savings or plan are among those most likely to be counting on the continued appreciation of their homes.

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“Owning a home is not a substitute for retirement planning,” says Tyler Fleming, director of the Investor Office of the Ontario Securities Commission. “Research like our study is key to improving our understanding of investor needs and issues.”

The survey also finds substantial gender differences. For example, women aged 55 and older are more stressed when it comes to retirement planning.

Clients worried about the future

The top financial concerns for a quarter of Ontarians aged 45+ are retirement-related, including having enough money for retirement, planning and saving for retirement, and maintaining quality of life in retirement.

Read: Why aren’t clients investing?

Following concerns about retirement, these clients express concerns about having enough money to pay for the cost-of-living today (13%), paying off or managing debt levels (10%) and investment performance, growth and protecting capital (9%). Just 11% say they don’t have any financial concerns.

Additionally, nearly three-quarters of pre-retirees (73%) own their home; 38% with a mortgage and 37% without a mortgage.

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The investment savings profile of this group is as follows:

• 38% have no investments;
• 21% have an investment portfolio less than $100,000;
• 25% have an investment portfolio between $100,000 and less than $500,000;
• 11% have an investment portfolio of $500,000 or more; and
• 5% would not disclose the size of their investment portfolio.

About the survey: The survey was conducted online among a representative sample of 1,516 Ontarians, 45 years or older, between May 9 and 16, 2017.