Baby boomers are rapidly approaching retirement, but aren't financially ready, according to a recent survey by TD Waterhouse. The survey polled boomers (ages 45-64) to determine their emotional and financial state heading into retirement. Sixty-seven per cent said they are worried they won't have enough money and only 15 per cent said they feel very well-prepared for retirement.
Only 34 per cent of boomers have a plan in place for retirement, according to the survey. The survey also found a correlation between having a financial plan and happiness levels: when thinking about their current or future retirement, boomers who have a financial plan are more likely to feel happy (55 per cent versus 31 per cent) or relieved (37per cent versus 22 per cent) than those without.
"Most Canadians recognize the importance of planning ahead to ensure that they are financially ready when they stop working. Yet, it's concerning that even as boomers approach retirement age, many still haven't established a comprehensive plan for achieving a financially-secure retirement," said Patricia Lovett-Reid, senior vice-president, TD Waterhouse. "Planning, saving and investing for retirement is even more critical now than ever before — we can't afford to ignore it."
The top three ways planned to fund retirement are: RRSPs (61 per cent), Old Age Security and the Canada Pension Plan (60 per cent) and company pensions (47 per cent). Thirty-nine per cent of boomers plan to fund their retirement by continuing to work.
The top three pieces of advice that boomers and pre-boomers (ages 65-74) recommend for the next generation are: start saving earlier (85 per cent), pay off your mortgage faster (61 per cent) and save more money or invest in an RSP (61 per cent).
"I agree that the most important tip is to start saving earlier: don't procrastinate," said Lovett-Reid.