Nearly 40 per cent of Canadians polled fear inadequate retirement funds

New research from the National Institute of Aging shows that, of the Canadians over 50 who were polled, almost 40 per cent feel they are not financially prepared for retirement.

Inflation and the rising cost of living have only compounded the issue and one of the reports author's says the issue is potentially impacting their health.

"It can impact their health and wellness and it can impact their ability to stay socially connected with others," said Dr. Samir Sinha, the co-chair of the National Institute on Aging. "It reminds us that affordability is increasingly not only an issue for Canadians in their day-to-day lives but it also impacts people's ability to save, so they can have enough money for their retirement as well."

According to the new study and its section on retirement readiness, the numbers show that 35 per cent of Canadians 50 and over say they can afford to retire at their desired time, while 39 per cent said they are not in a financial position to do so.

Halifax-based financial planner Timothy MacEachern is not surprised by the study’s findings, as his clients have expressed concerns about inflation and the high cost of living eating into their retirement savings and potentially forcing them to work longer.

"Right now with inflation, this is a conversation that I am having with every client, and everyone regardless of age is concerned," said MacEachern, the founder and senior advisor with Worthy Financial Inc.

There's a real fear that some might have to extend their working years to keep up with the rising costs of everyday items like housing and food, while others fear they might not see a day when they can retire, and it's adding stress.

"They don't want to be caught with a fixed income later and not have the ability to increase their income to match the new cost of living," said MacEachern, his best advice is to speak with a financial expert and to have a plan.

Dr. Sinha believes the study reveals a real problem that needs addressing, which underscores the worry that many Canadians might outlive their savings due to the rising costs of living and inhibit their ability to save.

Financial stress breeds anxiety and not only people's lifestyle but their physical and mental health as well says Sinha.

While some individuals choose to stay in the workforce longer, the concerns remain for those who are forced to extend their working years beyond their retirement goals.

“You can imagine people are worried. 'Am I going to be able to stay in the workforce as long as I need to, if I don't have and if I don't retire with enough money, and what kind of lifestyle will I have?'”