By Maxime Dupont-Demers
According to the 2014 Sun Life Post-Retirement Canadian Index, only 25% of the population expects their home or condo to be their primary source of retirement income.
With a significant mass of Canadians approaching retirement, questions surrounding financial life in the post-work world are mounting. Many of us believe that homeowners will benefit from selling their retirement homes. Not if we are to think a majority of Canadians and Quebecers. In fact, according to the 2014 Sun Life Post-Retirement Canadian Index, only 25% of the population expects their house or condo to be their primary source of retirement income.
This result may seem surprising. Indeed, with the increase in housing prices in major Canadian urban centers, such as the Montreal area, everything suggests that the potential income from a sale would be an unequivocal choice for many. This is surprising given that the people surveyed expect to repay their mortgage loan in a proportion approaching 60%, even before saving for retirement. Is it wise to favor one over the other? What if the real estate market did not experience the expected success? As this new reality approaches and depending on your savings, consider moving to a smaller property when you retire, allowing you to benefit from additional income. As the saying goes, diversifying your investment can reduce the risk. What do you think? Have you considered your priority? This calculator could help you see things a little more clearly!
Conducted for the sixth consecutive year with more than 3,000 respondents, this Sun Life Financial survey gives Canadians’ expectations regarding their finances. The priority of Canadians is by far debt repayment. With a ratio of debt to the personal disposable income of 160% in the average Canadian household, it’s understandable that 39% of Canadians make it their financial priority. We also note that the average age at which respondents expect to retire has reached its lowest level in the last four years, 66, compared to 69 in 2011. This leads us to believe that Canadians are more optimistic about their financial ability to retire.
This data highlights the importance of thinking about the best way to prepare for your financial future, and, in this regard, it becomes advantageous to consult a financial advisor who will be able to assess each particular situation and offer tailored advice.
There are still many questions to ask before retiring, while for others, the number of years is numbered! Fortunately, it’s never too late… or too early to think about it! I encourage you, too to keep an eye open to make your vision of retirement your reality.
