Secure cashflow for a secure retirement
The trend of mortality statistics in Canada has brought good news – Canadians are living longer. The implication for people considering retiring at age 65 is that they can expect to enjoy a long retirement. In fact, a male Canadian who has just retired, aged 65, will on average spend 19 years in retirement and a female 22 years. Further, 27% of males and 41% of females can expect to spend over 25 years in retirement.1 Any improvement in mortality would obviously increase these figures further.
However, as we face the combination of a longer retirement and persistently low interest rates, it is unfortunately an inevitable conclusion that the vast majority of retirees won’t be able to survive from investment income alone. Instead, participants will need to sell down their savings to meet spending needs and this will reduce the size of their savings over time.