A number of issues, including as inflation, changes in lifestyle, and longer life expectancies, have made retirement planning more difficult than it has ever been. According to a new Fidelity Canada retirement survey, Canadians now consider having $1 million by the time they retire to be a basic necessity rather than a luxury. This is an intriguing finding.
Retirement expectations doubled in the last two decades
In 2005, the average Canadian estimated that they would need approximately $4.47 lakh for retirement; today, that amount has risen to $10.2 lakh. The 2005 amount would be around $6.85 lakh dollars if it were adjusted for inflation in 2025. This means that now people are not only keeping inflation in mind for retirement, but are also considering a better lifestyle and long-term security important.
| Year | Expected Retirement Savings | Adjusted for Inflation (in 2025) |
|---|---|---|
| 2005 | $447,000 | $685,000 |
| 2025 | $1,020,000 | N/A |
Retirement is no longer as easy as before
According to the report, 88% of Canadians believe that planning for retirement today has become much more complicated than it was 20 years ago. Saving is not enough, but now they also have to deal with many challenges like inflation, stock market volatility, longevity and family responsibilities.
An interesting thing is that now people are looking at retirement not as an ‘end’ but as a new chapter of life. 85% of the respondents believe that there should be flexibility in retirement as well – whether it is part-time work or a personal project.
Emotional difference regarding retirement
81% of the people who have retired at present are satisfied with their situation, but only 59% of those who are preparing for retirement (pre-retirees) feel confident. The reason for this is – economic instability, political uncertainty and slow economic growth.
Approximately, half of pre-retirees think that they might need to delay their retirement now. whilst in 2005 the average retiring age was 61 years, currently it has risen to 65 years. And just a quarter of them think they will manage to retire before 65.
Financial Planning: The way to security
According to the report, people who have a professional financial advisor and a clear written plan are more confident about retirement. A solid plan not only helps them deal with the ups and downs of the market, but also gives better direction to their personal goals.
However, an important thing came to light in this too – women and immigrants feel less confident about retirement. This means that a similar plan does not work for everyone. Each person should plan according to his situation.
Now Canadians are thinking not just for themselves, but also for their families
Today, Canadian citizens are not only thinking about their retirement, but are also keeping in mind the future of their children and grandchildren. Many people now consider financially supporting their adult children, investing in their startups or careers as part of their retirement plan.
According to Michelle Munro of Fidelity Investments Canada, retirement now means more travel, longevity and also benefiting the next generation of the family with your financial resources.
Conclusion
The world of retirement has now completely changed. While earlier a limited amount of money was sufficient for a simple lifestyle, now the circumstances have become much more complex. For Canadians, $1 million is no longer a luxury, but a necessary reality. However, money alone is not the ultimate solution. What is needed is a flexible mindset, the right financial guidance and clarity of personal goals. Only then is a peaceful and secure retirement possible.
FAQs
Q1. Is $1 million really needed for retirement now?
Yes, inflation, longer lifespans, family responsibilities and the changing nature of retirement are making this amount a basic necessity.
Q2. Has the average retirement age increased?
Yes, the average retirement age has risen to 65 years, up from 61 years earlier.
Q3. Does planning with a financial advisor help?
Absolutely. Those who have a financial advisor and a written plan feel more confident and secure about retirement.
Q4. Why do women and immigrants feel less confident about retirement?
These groups lag behind in financial planning for a variety of social, economic and cultural reasons, leaving them more anxious about the future.
Q5. Do people want to work in retirement now?
Yes, 85% of people no longer consider retirement a full stop. They prefer flexible work or pursuing their interests.
