Older Canadians are looking to hold on to the accumulated wealth represented by their current residences
More than nine out of 10 (91%) Canadian homeowners have said that they are planning to remain in their current abodes for as long as possible, according to a poll by HomeEquity Bank and Ryerson University’s National Institute on Ageing.
A major driver of this decision is an impending retirement savings crisis that threatens older generations, HomeEquity said in the report announcing the survey results.
“Canadians are increasingly reporting concerns about having inadequate financial resources and outliving their retirement savings,” the report said. “The COVID-19 pandemic has exacerbated concerns about financial security in retirement. Nearly one in four Canadians now say that COVID-19 has affected the timeline for retirement, for either themselves or their spouse, and that they will have to work longer in order to address the shortfalls.”
Current social security systems in place will not be nearly enough to support elderly Canadians, HomeEquity said.
“A person relying on the average Canada/Quebec Pension Plan (CPP/QPP) payment, plus Old Age Security (OAS) and Guaranteed Income Supplement (GIS), will only receive around $1,730 per month,” HomeEquity said. “The reality is, Canadians have always been responsible for saving money to support their own retirement.”
Read more: Royal LePage: COVID-19 spurred home ownership among young Canadians
While workplace pension plans were historically used to address this deficiency, the report found that “nearly two thirds of Canadians do not participate in a workplace pension plan, and the overall median value of retirement assets among Canadians aged 55-64, without a work place pension plan, is just over $3,000.14,” HomeEquity said.
The steady advance of overall health standards has also pushed life expectancy to unprecedented heights, which means that Canadians considering retirement “must consider the need to finance longer time horizons and the likely possibility of increased future health care-related expenses,” HomeEquity said. “Canadians generally underestimate their life expectancy, further suggesting inadequate planning for longevity.”
