Best planning starts early

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With so many Canadians planning to retire over the next 10 years or so, no wonder we see such an obsession about the golden handshake. Then again, the Baby Boomer generation has long had the tendency to elbow its way into the spotlight.

People in general are feeling a bit more optimistic about when they’ll be able to end their working days, better than the outlook a couple of years ago following the economic downturn and corresponding poor performance of retirement savings vehicles.

A recent survey of Canadians found that on average people think they will be able to retire by age 66. That compares to 69, the average age given in a similar survey in 2011. The numbers come from a survey for Sun Life, conducted by Ipsos Reid last November.

For the classic Boomers, those aged 55 to 65 – in other words those closest to retirement – the average age given was 67. That suggests the uncertainty lingers somewhat.

The advice from those commenting on the poll results is similar to what financial advisers have been saying all along – the best course is to start saving early. They also suggest people review progress toward their goal 10 to 15 years in advance of retirement, alongside a realistic look at plans and needs.

These strategies are becoming evermore critical in recent years with fewer employees having the benefit of a company pension plan compared to a couple of decades ago.

It’s good to see increasing optimism among workers. But we must remember this comes after a couple of years of healthy performance in investments. Another year of flat returns in future might yield a less rosy outlook.

This survey report arises amid ongoing debate by politicians about ways to beef up the Canada Pension Plan, with some of the provinces in a hurry and the federal government less so. Given that general advice about the advantage of an early start on savings, a boost to CPP now would be wise to avoid continuing uncertainty for retirees in generations to come.

Organizations: Sun Life, Ipsos Reid

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