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Boomers are changing retirement planning

As they age

Thanks to the baby boomers – those born between 1946 and 1965 – and improved living standards, the average age of the Canadian population is rising.

According to Statistics Canada, seniors – those 60 and older – represent 19% of the population. Projections show that by 2016, seniors will account for 23% to 25% of the total population.

That’s only the beginning of the demographic wave. The peak year of the boom was 1960, which means the largest group is now in their late 40s to mid-50s, a time when many people begin to think about their retirement.

Source: Statistics Canada Population Projections for Canada, Provinces and Territories 91-520, December, 2005.


Sources: Statistics Canada Population by sex and group, January 2009.


Did you know?

As more Canadians shift into retirement, the landscape is changing.

  • > Company pension plan membership has been steadily declining for two decades, so that now only 40% of workers are guaranteed some sort of retirement income outside of government benefits.

  • > Two decades ago, government retirement plans, such as the Canada and Quebec Pension Plans and Old Age Security, provided nearly 60% of the average Canadian wage in retirement. Today, CPP/QPP provides a retirement income of only about 25% of the average wage. Add OAS benefits into the mix and that increases to only 40%.

  • > Most of your clients will likely require a retirement income that’s roughly 60% to 70% or more of their current level of income – that means there’s a large gap that will need to be filled.

Increasingly, Canadians will need to rely on their retirement savings in order to generate an adequate retirement income.

Source: Pension plan membership and government retirement plans, Indepth: Retirement Series – CBC News Online, February 2005.
* All amounts have been rounded. Based on 2009 maximum benefits at age 65, Canadian Pension Plan is $10,908 a year or $909 per month, and Old Age Security is $6,852 a year or $517 per month.

 

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