Latest Consumerology Report finds that three quarters of Canadians are financially unprepared for retirement and examines how Boomers will revolutionize this lifestage
TORONTO, November 5, 2010 /Canada NewsWire/ - The baby boomer generation has revolutionized every lifestage to date and will also revolutionize retirement, according to Bensimon Byrne's latest Consumerology Report.
"While most Canadians view retirement as a 'second life' - an opportunity to do the things they really want - we found three quarters of Canadians are financially unprepared to afford the lifestyle they imagine," said Jack Bensimon, president of Bensimon Byrne. "The 'new retirement' will look a lot more like a 'working retirement,' as retirees try to afford the quality of life they want to maintain."
Each quarter, the Consumerology Report, commissioned by the Toronto-based advertising agency Bensimon Byrne and conducted by The Gandalf Group, tracks consumer opinions about the economy, personal financial expectations, consumer buying intention, and attitudes toward key national issues. The purpose of this study was to explore perceptions and expectations about all facets of retirement. Among the findings, most people would like to retire earlier than they expect to be able to, but only a third of Canadians expect to be retired before 65 and almost one in five expect to be working after age 70.
"Due to the images marketers portray, we have a clichéd and dated view of retirement, centered around passive leisure," said Bensimon. "The reality is that many Boomers intend to have active retirement lifestyles. Over 50 per cent of Canadians expect to work in some capacity well into their so-called golden years, whereas more than three quarters of current retirees haven't worked in any capacity. And while future retirees expect family to be a big part of their retirement, they are also looking forward to going back to university, learning a new language, picking up a new skill, starting a business, and getting involved in the community."
The findings have implications for public policy makers and marketers, as a growing number of Canadians expect to work beyond the established retirement age of 65. For marketers, it means traditional messages about retirement will appear less relevant, and those who target only a younger workforce will be missing the opportunity to include older workers in their messages. Further, with an aging workforce, employers will be forced to consider the needs of older employees and ensure the work environment is designed with their needs in mind. On the upside, an aging workforce will create entirely new marketing opportunities by expanding the demographic for many categories like apparel, transportation, hospitality, and communications services.
"Boomers are going to revolutionize retirement," said Bensimon. "Their cognitive age is younger than previous generations at the same age. So we expect to see a combination of part-time work, part-time travel, reverse mortgages, exploring brand new interests, and caring for family as the most likely combination of activities in their retirement years."
The study found that despite their lifestyle goals, pre-retirement individuals do not have the financial resources in place to sustain those goals, partially explaining why they anticipate continuing to work for income.
Strikingly, people make almost no link between their aspirations for lifestyle in retirement and their savings plan. Almost three quarters of Canadians have not calculated what income their current retirement investments will provide during retirement.
"Working people are turning a blind eye to the realities of financing their ideal retirement," notes Bensimon. "They acknowledge they are not confident they have enough savings to pay for their retirement, but don't consider that fact when planning their future."
Today's workers also face different challenges in saving for retirement than their predecessors. The majority of people preparing for retirement admit to worrying they will outlive their savings and less than half have any employer sponsored pension plan. As a result, almost all Canadians expect government pensions, OAS and CPP/QPP, to be very important elements of their retirement income. Most homeowners will also be relying heavily on the equity in their home.
Additional Survey Highlights
...The average expected age of retirement for those who are still in the workforce is 62. However, for those already retired the average age they retired was 57.
...Majority of current retirees report being happier in retirement than when they were working.
85 per cent of retirees believe retirement is the best part of their life.
...Although, 40 per cent of current retirees say that their standard of living dropped when they retired.
...Working people also have positive expectations for retirement. They expect to be happier and less stressed.
...Compared with when they were working, current retirees spend less money on travel, entertain at home less, eat out less and spend less on clothing.
...Staying in the family home is a priority for most Canadians when they retire. 70 per cent of existing retirees did and 60 per cent of current workers expect to, yet two-thirds of homeowners are relying on their home for income in retirement.
...In retirement, people value the quality of their life over the length of their life.
...The main hopes for retirement are health, financial security, increased social activity and that their life will be long. The biggest fears are deteriorating physically or mentally, being poor and being a burden on one's family.
...The average life expectancy in retirement among Canadians is 25 years.
...More than half of working Canadians think about death frequently - less so in retirement.
...More than half of Canadians believe in assisted suicide.
...Most Canadians over the age of 50 say that current low interest rates are hurting them financially.
About the Survey
The Consumerology Report is a quarterly survey commissioned by Toronto-based advertising agency Bensimon Byrne. This quarter's survey was conducted by The Gandalf Group amongst 1,500 Canadians. The questionnaire was conducted in French and English over the period of September 20-30, 2010. Previous editions of the Consumerology Report have covered a variety of topics including: The Impact of Macro-economic Trends; The Impact of Environmental Issues; New Canadians, New Consumers; Corporate Social Responsibility; and Economic Trends and Consumer Behaviour. All reports can be found at www.consumerology.ca.
About Bensimon Byrne
Bensimon Byrne is a privately owned, full-service, Canadian advertising agency. Established in 1993, the agency has worked with a host of blue-chip companies and brands, producing some of Canada's most effective and memorable advertising.