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Canadians are rethinking their approach to retirement planning as a result of the COVID-19 pandemic. While a global pandemic is certainly not a great catalyst, it is encouraging to see more Canadians starting to make this a priority.
According to a study by IG Wealth Management release last week, which was conducted by Pollara Strategic Insights on behalf of IG, almost half of Canadians who are not retired say the pandemic has made them rethink what their retirement will look like, and how they will get there. A bit of a silver lining in my eyes.
The study also found that:
- 63% report that they would now prefer to spend their retirement in their own home, rather than a retirement facility.
- Half say the pandemic has made them prioritize being closer to family and remaining in Canada, rather than living abroad.
- one-third of Canadians who are not retired feel the pandemic will cause them to delay their retirement.
“It’s understandable that the events of the past year have caused many Canadians to pause and re-think what their futures will look like, including their plans for retirement,” said Damon Murchison, president and CEO of IG Wealth Management.
“Whether it’s staying in your current home for longer or re-evaluating how much healthcare coverage might be needed, these changing priorities can have a significant impact on your finances.
"This makes it all the more important to have a financial plan in place that includes a robust retirement component. And, perhaps just as critically, one that can evolve and be adapted to reflect your changing priorities.”
The study also revealed that most (88%) of working Canadians reported being uncertain about the amount of money they will need during their retirement to cover expenses and to last as long as they do. Other key findings from the study include:
- 67% now see a greater need for an emergency fund, both now and in retirement.
- Half of Canadians are now considering getting their estate plans in order before they retire.
- Two-fifths are thinking about the amount of healthcare coverage they will need in retirement.
- 46% believe they might need more money in retirement than they had originally thought.
These are all items that a financial plan will address. None of these are new issues that did not exist in pre-pandemic, it is really more a story of people who have previously “put off” dealing with them are now realizing that they can’t do so any longer.
A proper financial plan will detail exactly where you are today, where you’d like to be in the future, and provide a detailed roadmap of how to get there.
That plan needs to be updated regularly as your situation changes and tested against a variety of what-if scenarios to make sure it will hold up if the market drops, you live longer than expected, inflation spikes, or any number of other variables occur.
If you can take one positive out of our current world situation, use this time as a reason to get your own financial plan started or properly updated.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
