Canadians focus on 'covering the basics' of retirement
Investor sentiment slides through the first half of 2012
Canadians less likely to invest in savings vehicles
Younger Canadians more worried about healthcare costs and providing for
First time Manulife Financial Investor Sentiment Index has polled 2,000
National info-graphic attached
WATERLOO, ON, July 18, 2012 /CNW/ - Investor sentiment in Canada
continued to slide through the first half of 2012, according to the
latest Manulife Financial Investor Sentiment Index. Results from the
first half of 2012 show the Index now sitting at +24, down two points
from December 2011 (+26) and another five points from June 2011 (+29).
Overall, investor enthusiasm has decreased across almost all investment
vehicles, including fixed income investments, investment properties,
balanced funds and cash. The exception this period was appetite for
investing in the stock market, where sentiment is up by six points.
Measured against the December 2011 results, Canadians are less likely to
agree that it's a good time to invest in savings vehicles. Attitudes to
investing in mutual funds remain relatively steady this period with a
drop of only one point. In addition, TFSA remains high, but dropped
four points and RESP, RRSP and segregated funds all dropped
significantly - eight, seven and eight points respectively.
"Recent economic challenges, including the persistent financial
instability in Europe, help us understand why Canadians remain cautious
about investing," said Paul Rooney, President and CEO of Manulife
Canada. "As these global economic challenges dominate headlines without
any significant signs of recovery, confidence in financial markets will
continue to be uncertain."
This was the first time the Manulife Financial Investor Sentiment Index
increased its sample size to 2,000 investors to allow for
regional-specific data and to help demonstrate similarities and
disparities across the country. The Index tracks Canadians' opinions of
various savings and investment vehicles and whether they believe it is
a "good" or "very good" time to invest minus those who feel the
Canadians' Outlook on Retirement
During this period, the Manulife Financial Investor Sentiment Index also
took a look at Canadians' retirement goals. The survey results indicate
that Canadians are increasingly considering retirement as a time where
the focus is on surviving financially, rather than enjoying the freedom
and lifestyle retirement brings.
Most Canadians surveyed indicate that covering the basic cost of living
is their most important goal for retirement with 88% noting it as
important/very important. The traditional "freedom" goals, including
travel, building an estate for heirs and donating to charity, are all
deemed important by fewer than 50% of respondents.
How Family Income Influences Outlook on Retirement
Notably, as family income rises, the importance of 'covering the basic
cost of living' and 'covering the lifestyle I'm accustomed to' as a
retirement goal increases for Canadians. 'Covering the lifestyle I'm
accustomed to' peaks as family income rises over $100K, with 84%
classifying it as important/very important compared to the national
average of 72%.
While families with higher income are most concerned with maintaining
the lifestyle they're accustomed to, families with lower income are
more concerned about leaving behind an estate. 'Accumulating an estate
to leave behind for heirs' peaks at 52% for those with family income
between $15-25K, compared to 36% nationally.
"These results indicate that despite changing expectations about
retirement goals and lifestyles across all those surveyed, families
with lower income maintain a strong desire to leave their families with
the resources to create better opportunities than they had for
themselves," noted Mr. Rooney. "Thinking about future generations is a
constant when it comes to retirement planning."
Giving to Charity
Nationally, 31% of Canadians rate 'donating money to charity' as a
priority - making this the lowest ranked retirement goal on the list.
Of those that rate this as an important goal, most are between the ages
of 18 - 29 years (43%) and 75 years and older (45%).
Young Canadians on Retirement
With the retirement of the baby boom generation, the economic landscape
in Canada will shift, and the greatest impact of that change will be
felt by young Canadians (ages 18-29 years). This period's results
indicate that younger Canadians are considering that potential impact,
showing a greater concern for long-term healthcare costs and providing
for family than their parents' generation. Retirement goals for young
Canadians differ from older Canadians in two areas. Younger Canadians
are more likely to identify covering healthcare needs (87%) and
providing for family in case of illness/death (88%) as important
priorities. Both of these categories decrease in importance with age.
For example, 'providing for family in case of illness/death' ranked
third overall with 80% of those surveyed stating it was important/very
important. This number decreases to only 66% with Canadian's who are 75
Another significant difference between generations is related to
investment vehicles. Nineteen percent of young Canadians select CPP/QPP
as their primary source of retirement funds, compared to the national
average of 13%. This is probably because young Canadians are less
likely to have other savings vehicles in place early in adulthood.
About the Manulife Financial Investor Sentiment Index
For 13 years Manulife Financial's Investor Sentiment Index has been
measuring Canadians' opinions about whether it's a good time or bad
time to invest in different asset classes and investment vehicles. The
index is based on a phone survey of 2,000 Canadians aged 18+. It was
conducted between May 2 and May 15, 2012 by Research House, an
About Manulife Financial
Manulife Financial is a leading Canada-based financial services group
with principal operations in Asia, Canada and the United States. In
2012, we celebrate 125 years of providing clients strong, reliable,
trustworthy and forward-thinking solutions for their most significant
financial decisions. Our international network of employees, agents and
distribution partners offers financial protection and wealth management
products and services to millions of clients. We also provide asset
management services to institutional customers. Funds under management
by Manulife Financial and its subsidiaries were C$512 billion (US$512
billion) as at March 31, 2012. The Company operates as Manulife
Financial in Canada and Asia and primarily as John Hancock in the
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE,
and under '945' on the SEHK. Manulife Financial can be found on the
Internet at manulife.com.
Image with caption: "Visualizing Canada's Retirement Priorities (CNW Group/Manulife Financial Corporation)". Image available at: http://photos.newswire.ca/images/download/20120718_C8893_PHOTO_EN_16275.jpg
SOURCE Manulife Financial Corporation
For further information:
Tracy Van Kalsbeek
Public Relations Consultant
Manulife Financial Canadian Division