According to a recent Decima Research survey, nearly half (46 per cent) are banking on employer-sponsored pension plans as part of their retirement mix. Little do people know (they are too arrogant or ignorant, both are bad) that company pension plans WILL NOT BE ENOUGH for you to retire on. Have you looked outside? Prices of goods aren’t going down, you’ll need more, so get ready to work till you’re 70.
But of the 40 per cent who contribute to a company pension plan, more than half (51 per cent) are unsure whether their plan is a defined benefit or defined contribution plan. Less than half of that same group knows what their pension plan will pay during retirement. Canadians can also benefit from getting creative and looking beyond traditional retirement savings vehicles. Only 15 per cent of Canadians will use insurance as a source of retirement income, and only 17 per cent will use annuities. Either they don’t have the cash or they blow it on frivilous consumer items.
Other sources of retirement income reported in the survey include the Canada Pension Plan (74 per cent), RRSPs (75 per cent) and other personal investments (57 per cent). A financial planner can work with families to determine which strategies would be most effective in their situation. The Decima data were gathered between October 20th and October 30th, 2006, through Decima eVox, the company’s large national online panel. Results are based on a sample of 2,170 Canadians, and the corresponding margin of error is 2.2%, 19 times out of 20.