💵 Planning Ahead Pays Dividends: How Canadians in and Approaching Retirement Can Build Resilience Against Inflation and Instability

Tuesday, 13 June 2023 10:22.AM

- Despite rising cost of living and market volatility, Canadians remain optimistic about retirement thanks to having a financial plan -

Fidelity Investments Canada ULC (Fidelity) today released the 2023 Fidelity Retirement Report, providing financial advisors and investors insights into the latest retirement trends and steps they can take to better prepare for and live in retirement.

The 18th edition of this report offers analysis on both long-standing factors we have been tracking for nearly two decades as well as topical factors, like inflation, housing, interest rates and market volatility – and how these are impacting retirement planning. The findings reaffirm that a financial plan and the value of professional advice remain an effective all-weather solution for Canadians approaching and in retirement, and especially so under today's stressful market conditions.

Key findings:

• Canadians are feeling less optimistic about retirement. In 2018, 80% of pre-retirees and retirees felt positive about their outlook in retirement. This number dropped to 73% in 2023, with the rising cost of living being the most cited obstacle holding them back from retiring.
• As a result of the ongoing cost of living crunch, 42% of Canadians report saving less compared to last year.
• 50% of Canadians report that they are only investing in safe assets, which could have an unintended consequence of diminishing their retirement income over the long term. This represents a 10-percentage point increase over last year.
• On the other hand, Canadians who have a written financial plan relative to those who do not have one report feeling significantly better prepared financially (91% vs 58%), emotionally (85% vs 69%), socially (84% vs 69%) and physically (88% vs 73%).
• While Canadians are saving for a range of priorities, those born outside of Canada are more likely to prioritize saving to support family members.
• Of those who have a written financial plan, 82% worked with a financial advisor to build the plan. 64% of pre-retirees with an advisor report having peace of mind that their financial goals are on track, compared to 34% for those without an advisor.
• 28% of Canadians have a written plan – which means many have yet to take advantage of this helpful tool. Quebeckers, at 33%, are the most likely have a written financial plan – and accordingly, at 79%, they have the most positive outlook on retirement.

"By getting to work on a financial plan for retirement, Canadians can find some hope amid persistent negative headlines. Groceries, energy bills, clothing – these are just some of the everyday items affected by inflation, holding Canadians back from retiring when they would like to," said Peter Bowen, Vice President, Tax and Retirement Research, Fidelity. "The value in having a written financial plan is a theme we see year after year, and yet the majority of Canadian's don't have one. The ones who do are working with a financial advisor, and overall, they're developing healthier saving and investing habits."

SOURCE: Fidelity Investments Canada ULC

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