Posthaste: Anxious Canadians putting retirement on hold as inflation makes everything more expensive

© Provided by Financial Post Canadian are worried they won’t able to afford retirement.

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Good morning!

Canadians are hitting the brakes on their retirement plans for fear they can’t afford to stop working as high inflation eats away at their savings and makes life more costly.

More than 60 per cent of people who haven’t yet retired say they’re delaying their start date because everything has gotten so expensive, new research from Fidelity Investments Canada ULC said. Inflation is their primary worry, with 66 per cent fearing it will erode their savings and their way of life. Another 55 per cent fear they don’t even have enough saved to begin with.

The weak stock market is only making things worse for those wanting to quit working. Close to half, or 45 per cent, are pressing pause on retirement because they’re worried about their investments. Debt is also a concern, with 33 per cent saying high debt levels are holding them back. At the same time, it’s getting more expensive to pay down that debt, with costs expected to balloon as interest rates keep going higher. The Bank of Canada has made it clear that it’s not done hiking just yet.

“With stubborn inflation, market volatility and global uncertainty, it’s not surprising that Canadians are anxious about their future and their retirement,” Peter Bowen, vice president of Tax and Retirement Research at Fidelity said in a news release .

Those nearing retirement are also worried about high health-care costs wrecking their financial security once they pull the plug on their jobs. More than half also fear they’ll outlive their savings. All together, the results show Canadians today feel much less prepared to retire than they did just one year ago, Fidelity said.

The research comes as workers in Canada have never been older, with almost 22 per cent of the population between the ages of 55 and 64, according to Statistics Canada’s 2021 census . That could fuel what some are calling a “grey tsunami” of baby boomers retiring all at once, which would exacerbate the country’s skilled worker shortage.

But financial worries could keep more older Canadians working for longer, Fidelity’s survey suggests. Of retirees still holding down a part-time job, more than half say it’s for financial reasons. Meanwhile, 60 per cent of those not yet retired expect to keep working in some capacity in their golden years.

For those who do want to take the leap to retirement, there does appear to be one way to soothe affordability anxiety, and that’s to have a plan. Indeed, 83 per cent of people with concrete, written plans say they feel financially prepared for retirement, compared to 47 per cent who don’t have a plan, Fidelity’s survey said. Still, only 23 per cent have plans at all.

“Those without a plan should seriously consider the benefit it could have for their overall well-being,” Bowen said.

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Canadian home sales edged up 1.3 per cent in October, the first monthly gain since February, as buyers showed signs of coming off the sidelines, according to figures released Tuesday by the Canadian Real Estate Association (CREA).

The slight increase in sales volumes was accompanied by a decline in prices. The MLS Home Price Index fell by 1.2 per cent on a month-over-month basis and 0.8 per cent over the same month in 2021. The actual national average home price was $644,643 in October 2022, down 9.9 per cent from the same month last year.

— Shantaé Campbell, Financial Post

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© Provided by Financial Post

  • SAAS North, Canada’s largest, in-person B2B event where Canada’s fastest growing Software as a Service (SaaS) companies come to learn, network and grow takes place in Ottawa from Nov. 16-17
  • Karina Gould, minister of families, children and social development; and Mona Fortier, president of the Treasury Board and Liberal MP for Ottawa-Vanier, will announce the launch of an online questionnaire to seek feedback on a national school food policy
  • The Senate committee on transport and communications will hear from Ian Scott, chairperson and CEO of the Canadian Radio-television and Telecommunications Commission, on the subject matter of Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts
  • The Portfolio Management Association of Canada 2022 National Conference takes place in Toronto. John McKenzie, CEO of TMX Group, will sit down with Rita Trichur from the Globe and Mail to discuss the key steps to ensure Canada’s public markets remain vibrant and globally competitive, and how public policy can enhance capital market conditions and clear a path to long-term success
  • Transport Minister Omar Alghabra will make a funding announcement about the Port of Prince Rupert, related to the government of Canada’s work to strengthen Canada’s supply chain. Shaun Stevenson, president and CEO of the Prince Rupert Port Authority; and Rob Booker, president and CEO of Trigon Pacific Terminals, will also speak
  • The Vancouver Board of Trade hears from Robin Silvester, president and CEO of the Vancouver Port Authority as he delivers his 14th annual “State of the Port” address
  • Prime Minister Justin Trudeau will attend the G20 closing session in Bali, Indonesia
  • Today’s data: Canadian housing starts, consumer price index; U.S. retail sales, trade price indices, industrial production and capacity utilization, business inventories
  • Earnings: Loblaw Cos. Ltd., Metro Inc., Nvidia Corp., Cisco Inc., Lowe’s Companies Inc., Target Corp. TJX Cos. Inc.

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© Provided by Financial Post

© Provided by Financial Post

 

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© Provided by Financial Post

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Today’s Posthaste was written by Victoria Wells (@vwells80), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

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