Toronto, ON, February 25, 2013 – According to a new survey conducted for the Investor Education Fund, Canadians are not saving enough for retirement, and half believe they will run out of their retirement savings in the first 10 years of retirement. Despite the lack of retirement savings, the survey revealed that four out of 10 respondents were not willing to consider capitalizing on home equity as an option for retirement income.
The study set out to address three key issues:
- To what extent is household wealth locked into the value of a home or other property?
- To what extent and how will people pay off home-related debt during their retirement?
- In what ways are people willing to use their home equity to generate retirement income?
- Survey respondents lack knowledge of how much income they will need in retirement. One-quarter (24 per cent) of Canadian households have no idea how much they will need to draw from their savings/investments every year after retirement, including their company pensions.
- Canadians are not saving enough for retirement. One-third (33 per cent) of Canadian households do not believe they have enough saved for retirement, and one-quarter are not certain.
- Homeowners have not considered home equity as a potential source of retirement income. Half (48 per cent) of the respondents have never thought about selling their home as a way to generate income to live on in retirement.
- Respondents expect to enter retirement with debt, and plan to use savings to pay it off. One-quarter (24 per cent) of homeowners expect to have debt on their principal residence after they retire, with a median debt of $71,000. Of this group, one-half (49 per cent) expects to pay the debt from their retirement income, and one-quarter (27 per cent) doesn’t know how they will pay it off.
About the survey:
The survey was developed in January 2013 by The Brondesbury Group via online interviews conducted with a representative group of 1500 current and former homeowners across Canada. All respondents were at least 50 years old. Half were retired. The margin of error is +/- 2.5%, 19 times out of 20.
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