Canadians working to solve their “retirement riddle”
WINNIPEG, MB – February 21, 2007 – Many Canadians face a challenging riddle when considering how they will support their lifestyle in retirement. According to a recent Decima Research survey, nearly half (46 per cent) are banking on employer-sponsored pension plans as part of their retirement mix.
But of the 40 per cent who contribute to a company pension plan, more than half (51 per cent) are unsure whether their plan is a defined benefit or defined contribution plan. Less than half of that same group knows what their pension plan will pay during retirement. While members of defined benefit pension plans are guaranteed a specific amount during retirement, often based on salary and years of service, individuals with defined contribution plans face greater uncertainty: a certain amount of money is contributed to the plan each year, but benefits paid may change based on a number of factors.
“Canadians need to be proactive in learning about employer pension plans” says David Ablett, Investors Group’s Senior Tax and Retirement Planning Specialist. “Every pension is different and it’s important to understand how yours works, and just how much income it will generate during retirement.”
Canadians can also benefit from getting creative and looking beyond traditional retirement savings vehicles. Only 15 per cent of Canadians will use insurance as a source of retirement income, and only 17 per cent will use annuities.
“Everyone’s situation is different and there are many ways to solve the retirement riddle,” says Ablett. “It is important for individuals to take stock of their sources of income in retirement as a whole as opposed to in isolation.”
Other sources of retirement income reported in the survey include the Canada Pension Plan (74 per cent), RRSPs (75 per cent) and other personal investments (57 per cent). A financial planner can work with families to determine which strategies would be most effective in their situation.
The Decima data were gathered between October 20th and October 30th, 2006, through Decima eVox, the company’s large national online panel. Results are based on a sample of 2,170 Canadians, and the corresponding margin of error is 2.2%, 19 times out of 20.
Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of approximately 3900 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and banking services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada’s premier financial services companies with $121 billion in total assets under management.
| For more information contact: | |
|---|---|
| Ron Arnst Media Relations (204) 956-3364 ron.arnst@investorsgroup.com |
Laura Vallis Environics Communications (416) 969-2781 lvallis@environicspr.com |
