More than half of us fear our retirement plans are in trouble: Scotiabank survey

A new survey from Scotiabank finds that 59 per cent of us are feeling “negative” about our investments, up from just 33 per cent in a similar survey carried out last fall.

Highlights from the Scotiabank Global Asset Management Investor Sentiment Survey were reported upon in a recent Windsor Star article.

“Investors’ top five perceived risks to their portfolios over the next couple of years were an economic recession (61 per cent), rising inflation (58 per cent), stock-market volatility (46 per cent), rising interest rates (40 per cent) and global geopolitical risk (37 per cent),” reports the Star.

The article says the lack of a written financial plan may also be a source of “angst.”

“These results indicate that investors have current concerns about meeting their retirement goals, however, regular meetings with financial advisers and having a written financial plan diminish those concerns,” Neal Kerr, head of Scotia Global Asset Management, states in the article.

The article then creates a link between having a financial plan, and being confident about retirement.

A different survey from the Bank of Montreal found that “52 per cent of women are confident about retiring at their target age compared to 68 per cent of men,” the Star reports.

That same survey found that 73 per cent of women surveyed don’t have a financial plan, compared to 64 per cent of men, the newspaper reports.

As well, the Star report notes, 87 per cent of women surveyed “reported having a fear of unknown expenses,” and 63 per cent “had anxiety about keeping up with their monthly bills.”

“Financial planning and financial literacy are imperative when navigating finances to ensure customers are making real financial progress,” states BMO’s Gayle Ramsay in the article. “With most women reporting they have no financial plan in place, they can start to alleviate their anxiety and take control of their finances by evaluating their budgets, adjusting spending habits accordingly and committing to a savings and retirement plan,” she tells the Star.

So let’s tally up what we’ve learned here. Canadians worry about how their investments are going in this volatile era, but as well, they haven’t planned out what life in retirement will be like so they are worried about that as well. In short, they don’t know how much they’ll have to spend in retirement, and aren’t sure how much it will cost.

The advice we received from an actuary friend as we rolled into retirement was not to fixate on the difference between our gross work pay and gross pension amount, but to do a net-to-net comparison. This was good advice; our income dropped by more than half but our tax bill was far lower. Other deductions we faced while working disappeared in retirement, such as pension contributions, EI, and so on, and our commuting bill for trains and parking fell to zero.

The article is correct in underlining the importance of a financial plan. That plan should take into account what all your sources of income will provide you in retirement, including government benefits, workplace pensions and personal savings.

That’s one side of the balance sheet. You should then take an honest look at the costs you will be facing in your life after work. If your income is more than enough to cover your costs, hooray! If not, you may need to tweak a few things to get yourself there, such as going to one car, or working part-time in retirement, or even downsizing to a smaller home or community.

It’s still all about living within your means.

According to Statistics Canada, 6.6 million Canadians have are covered by registered pension plans as of January 2021. That sounds good until you realize that the country’s population is approaching 40 million.

So the majority of us don’t have a pension at work. Fortunately, there’s a solution for any Canadian with available registered retirement savings plan (RRSP) room — the Saskatchewan Pension Plan. SPP is a one-stop shop for investing and growing your savings, and helping you convert it to income when you retire. Find out how SPP has been delivering retirement security for more than 35 years, and check them out today!

Breaking news — contributing to your SPP account is easier than ever. You can now contribute any amount per year up to your available RRSP room. And if you are transferring funds into SPP from an RRSP, there is no longer an annual limit — you can contribute any amount! The retirement future with SPP is now limitless.

Join the Wealthcare Revolution – follow SPP on Facebook!

One-third of Canadians more worried about retirement now versus last year

New research from Scotia Global Asset Management (GAM) Canada, reported on by Wealth Professional, shows 32 per cent of Canadians are today “more worried about their ability to fund their retirement” than they were a year ago.

A further 45 per cent say “the COVID-19 pandemic has impacted their retirement plans,” the magazine reports. Another poll from Scotiabank, its annual Worry Poll, recently found that a whopping 75 per cent of us are “worrying about their finances,” Wealth Professional explains.

The article says getting professional assistance may be a way to chase away the retirement saving blues.

“Confidence levels are boosted when working with a financial article,” the report notes, adding that “87 per cent of Canadians who met with an advisor in the past six months… (say) their advisor makes them feel confident that their investments will be OK.” That confidence level drops to 67 per cent among those “who did not meet with an advisor.”

“These results indicate that while investors are concerned about meeting their retirement goals, regular meetings with financial advisors significantly alleviate those concerns. In a continually changing environment, the value of advice prevails,” Neal Kerr, Head, Scotia GAM Canada, states in the article.

Further findings from the survey suggest that 86 per cent of respondents feel “their advisor keeps them on track to meet their goals, regardless of market changes,” and that 76 per cent feel “they are better off financially than if they managed their money on their own.”

The article concludes by urging advisors to seek out new clients, in an effort to show them “the future is brighter than they may think.”

Save with SPP has long been a bit of a lone wolf when it comes to advice, but now – in our senior years – we are seeing the benefits of getting legal, financial and other advice when warranted. We recently had to get the services of an immigration lawyer to clear up the citizenship status of a late relative. We employed a disability benefits specialist to help another relative who is recovering from a bad accident. Efforts to try and solve these problems on our own had been going nowhere; now both are either resolved or on the road there.

Another place where we tend to hate getting advice is on the golf course. Yet the three other players in our foursome are consistently improving while we flail away the same old way. They are equipped with fancy GPS watches that tell them the distance to the green, suggest what club to use, all while keeping track of their scores. Our watch tells us the time. They take lessons and practice. We warm up on the first tee only. They are getting ahead, we are staying behind. Hmmm.

One place where we enjoy the benefits of professional advice is in our Saskatchewan Pension Plan accounts. Do you know that SPP, whose Balanced Fund returned an impressive 11.53 per cent last year, features professional investing at a very low fee? While last year’s returns are no guarantee of what lies ahead for investments, it’s nice to know that someone other than oneself is at the rudder to pilot us through these turbulent economic times.

Join the Wealthcare Revolution – follow SPP on Facebook!