The Myth of Retiring to a Life of Leisure



    Survey reveals most Canadians unsure about retirement, maintaining their
    lifestyle

    TORONTO, March 18 /CNW/ - For many Canadians, the dream of a life of
leisure at 65 is no longer a certainty. According to a joint SECOR
CONSULTING/Leger Marketing national survey of over 1,500 Canadians, 47 percent
of Canadians age 45 to 54 do not plan to fully retire, will work to remain
active or will earn money to survive.
    "It seems increasingly important for people to understand how much money
will be required to support their current lifestyle through retirement, and
consequently, retirement planning is increasingly complex," commented Louis
Regimbal, Partner at SECOR. "Understanding the 'ins and outs' of retirement
saving options, insurance, wealth transfer, inheritance and tax implications,
coupled with longer life expectancy have created uncertainty for Canadians.
This presents an opportunity for innovative financial institutions to
'demystify' wealth transfer and retirement savings to help Canadians better
understand what is required to maintain their current lifestyle in
retirement."
    Our expectations of retirement have changed since our parents'
generation. The survey results illustrate that as Canadians become older,
maintaining their current lifestyle becomes more important. Eighty-six percent
of respondents between 45 and 54 years of age highlighted maintaining their
current lifestyle as very important. Over time, the worry that this will not
be possible also increases.
    Will inheritance be the answer? Only partially. The survey found that
most Canadians believe that they will be almost 60 by the time they receive an
inheritance. According to Dave Scholz, Vice President at Leger Marketing,
"Canadians expect to inherit later in life, when their financial needs shift
from paying-off debts to supporting themselves in retirement." Forty percent
of Canadians age 25-64 plan to use their inheritance to supplement their
income and investments.
    There is also a segment of the population that feel they will not have
the time to spend their inheritance or will choose to save it for their
children. 20 percent of respondents over age 65 said that they would save
their inheritance for their heirs. "We refer to this as the 'Prince Charles
effect'", said Jean-Pierre Sablé, Partner at SECOR Consulting as Prince
Charles may be passed over in royal succession. "In this case, wealth will
pass between three generations in transferring to the next generation. Yet
this need is not being adequately met by financial institutions today."
    In addition, the next generations receiving their inheritance have
different views of what they will do in retirement. Seventy-three percent
place a high importance on maintaining lifestyle in retirement. In addition,
36 percent of Canadians age 18-24 say they will likely travel and live abroad
in retirement, as opposed to only 8% of people over age 55 that expect that
lifestyle.
    What do these trends mean for Canadians and their financial advisors?
"The implication for both Canadians and their financial advisors is the need
to look at multi-generational relationships, products and services in a more
holistic way," said Sablé. "This also requires financial institutions to
develop more global products and services to meet international aspirations of
the next generation."
    Financial advisors also have an opportunity to better address
inheritance. Only 50 percent of Canadians across all age, ethnic and wealth
segments are discussing money matters with parents or children. Fifty-eight
percent identified themselves as the person who prompted discussions
concerning inheritance, while only 4 percent said it was their financial
advisor who initiated the discussion. "With changing demographic needs, we
expect an impending race by wealth management and insurance organizations to
fill market gaps and meet demand," said Regimbal.

    
           This press release also includes selected tables (below)
    

    Background

    As part of ongoing research, SECOR CONSULTING in partnership with Leger
Marketing asked several questions on inheritance, wealth transfer and
retirement in a survey conducted online between December 6 and 11, 2007 using
Leger's panel of more than 300,000 Canadians. A total of 1,504 interviews were
completed with adults age 18 and over. The margin of error for a sample of
this size is +/- 2.6%, 19 times out of 20.

    Louis Regimbal is a Partner at SECOR and brings over 15 years of strategy
consulting experience. He is a senior strategy consultant specializing in
financial services in which he works directly with senior management to
develop and implement strategic initiatives such as looking for growth
opportunities, managing change and identifying and valuing acquisition
targets.

    Jean-Pierre Sablé is a Partner at SECOR with an international business
career that spans over 20 years (Paris, Montreal and New York). He specializes
in working with senior executives of global firms to address their key
strategic issues. Jean-Pierre has been a frequent advisor to financial
services clients in the areas of Personal Banking and Wealth Management.

    David Scholz is a Partner at Leger Marketing, on Leger's Board of
Directors and Vice President responsible for Leger's Toronto office. As well,
Dave is an adjunct professor with Syracuse University in New York and McMaster
University in Hamilton teaching communications research in their joint Masters
in Communication Management Program. With over 15 years experience in public
opinion and market research, Mr. Scholz has been a leading figure in all
phases of both qualitative and quantitative projects across Leger Marketing's
divisions.

    About SECOR Consulting

    SECOR CONSULTING is a leading Canadian-based international strategy
consulting boutique with offices in Montreal, New York, Paris and Toronto.
SECOR has been helping leading corporations, large government agencies and
crown corporations for over 30 years. Our strategy services include: strategic
planning, mergers and acquisitions, new business development, partnerships and
joint ventures, innovation, economic analysis, organizational design,
leadership and culture.

    About Leger Marketing

    LEGER MARKETING is the largest Canadian-owned research company with
offices across Canada, in the US, and with partners worldwide. We offer solid
expertise, unique research approaches and rigorous offering (panels, Web
panels, Omnibus, syndicated studies). Leger Marketing is recognized for its
expertise in market research in the pharmaceutical, financial,
telecommunications, communications and media, retail, electronic commerce and
public affairs sectors.

    
    SELECTED TABLES:
    ----------------

    TABLE 1. AS CANADIANS BECOME OLDER, MAINTAINING THEIR CURRENT LIFESTYLE
BECOMES MORE IMPORTANT.

    Question: "How important is it to you that you maintain your current
lifestyle in your retirement...?" (n = 1504)

    -----------------------------------------------------
    Level of
     Importance  18-24  25-34  35-44  45-54  55-64   65+
     by Age
    -----------------------------------------------------
    IMPORTANT     65%    79%    83%    86%    84%    91%
    -----------------------------------------------------
    Very
     Important    21%    39%    38%    38%    39%    40%
    -----------------------------------------------------
    Somewhat
     Important    45%    40%    46%    49%    45%    51%
    -----------------------------------------------------

    -----------------------------------------------------
    NOT
     IMPORTANT    24%    12%    12%    12%    14%     8%
    -----------------------------------------------------
    Not
     Very
     Important    14%     9%    10%     9%    11%     7%
    -----------------------------------------------------
    Not at All
     Important    10%     3%     3%     3%     3%   0.3%
    -----------------------------------------------------


    TABLE 2. INDIVIDUALS MAY NOT KNOW OR FULLY UNDERSTAND WHAT THEIR NEEDS
    WILL BE IN RETIREMENT (A). THERE IS A TREND TOWARD INTERNATIONAL
    ASPIRATIONS IN RETIREMENT (B)

    Question: "Which one of the following ways best describes how you
personally view retirement, would you say that you would...?" (n = 1504)

    -------------------------------------------------------------------------
    A. Activities in Retirement by        Net Worth             Net Worth
     Wealth Bracket                     less than 100K      greater than 100K
    -------------------------------------------------------------------------
    Do Not Plan to Retire                     7%                    2%
    -------------------------------------------------------------------------
    Work to Remain Active                    27%                   28%
    -------------------------------------------------------------------------
    Work to Earn Money and Survive           13%                    7%
    -------------------------------------------------------------------------
    Do Not Plan to Work in Retirement        23%                   37%
    -------------------------------------------------------------------------
    Travel and Live Abroad                   17%                   15%
    -------------------------------------------------------------------------
    I Don't Know/Prefer not to Answer        13%                   11%
    -------------------------------------------------------------------------
    Total plan to continue working (highlighted) = 47%



    -----------------------------------------------------------
    B. Activities in
     Retirement by    18-24   25-34  35-44  45-54  55-64   65+
     Age
    -----------------------------------------------------------
    Do Not Plan to
     Retire             4%      7%     3%     9%     3%     -
    -----------------------------------------------------------
    Work to Remain
     Active            27%     28%    26%    25%    30%    15%
    -----------------------------------------------------------
    Work to Earn
     Money and
     Survive            6%      7%    15%    15%    11%     8%
    -----------------------------------------------------------
    Do Not Plan to
     Work in
     Retirement        12%     22%    23%    23%    36%    54%
    -----------------------------------------------------------
    Travel and
     Live Abroad       36%     23%    18%    12%     8%     8%
    -----------------------------------------------------------
    I Don't Know/
     Prefer not to
     Answer            15%     15%    16%    16%    13%    15%
    -----------------------------------------------------------


    TABLE 3. CANADIANS BELIVE THEY WILL BE ALMOST 60 BY THE TIME THEY RECEIVE
    AN INHERITANCE AND THIS TREND CONTINUES WITH THEIR CHILDREN AS WELL.

    Question: a) "How old do you think you will likely be when you
inherit...?" (n = 1504)

    --------------------------------
    Age of Attaining   % of Total
     Inheritance       Respondents
    --------------------------------
    18-25             less than 1%
    --------------------------------
    25-35                  2%
    --------------------------------
    36-45                  5%
    --------------------------------
    46-55                 12%
    --------------------------------
    55-65                 17%
    --------------------------------
    66-75                 12%
    --------------------------------
    75+                    5%
    --------------------------------
    I don't know          46%
    --------------------------------
          MEAN AGE: 59 Years
    --------------------------------

    Question: b) "How old do you think your heirs will likely be when they
inherit...?" (n = 1304)

    --------------------------------
    Age of Attaining   % of Total
     Inheritance       Respondents
    --------------------------------
    18-25             less than 1%
    --------------------------------
    25-35                  3%
    --------------------------------
    36-45                  8%
    --------------------------------
    46-55                 17%
    --------------------------------
    55-65                 22%
    --------------------------------
    66-75                 12%
    --------------------------------
    75+                    6%
    --------------------------------
    I don't know          33%
    --------------------------------
          MEAN AGE: 58 Years
    --------------------------------


    TABLE 4. CANADIANS ARE PLANNING FOR THE FUTURE AND HAVE DISCUSSED
    INHERITANCE.

    Question: a) "Have you ever discussed leaving money matters with your
children or parents?" (n = 1504)

    ----------------------------------------------------
    Have discussed leaving money matters    % of Total
     with children or parents               Respondents
    ----------------------------------------------------
    Yes                                          50%
    ----------------------------------------------------
    No                                           50%
    ----------------------------------------------------

    Question: b) "Who Prompted that discussion?" (n = 749)

    --------------------------------------------------
    Person prompted the discussion       % of Total
                                         Respondents
    --------------------------------------------------
    Self                                     58%
    --------------------------------------------------
    Parent                                   21%
    --------------------------------------------------
    Family Member                             8%
    --------------------------------------------------
    Financial Advisor                         4%
    --------------------------------------------------
    Lawyer                                    2%
    --------------------------------------------------
    Child                                     1%
    --------------------------------------------------
    Friends                             less than 1%
    --------------------------------------------------
    Other                                     2%
    --------------------------------------------------


    TABLE 5. ABOUT 40 PERCENT OF CANADIANS AGE 25-64 PLAN TO USE THEIR
    INHERITANCE TO SUPPLEMENT THEIR INCOME AND INVESTMENTS. 20 PERCENT OF
    RESPONDENTS OVER AGE 65 SAID THAT THEY WOULD SAVE THEIR INHERITANCE FOR
    THEIR HEIRS.

    Question: "What will you do with the majority of your inheritance that you
may receive in the future?" (n = 1504)

    -----------------------------------------------------------------
    What would you do with   18-24  25-34  35-44  45-54  55-64   65+
     your Inheritance
    -----------------------------------------------------------------
    Supplement my Income      27%    41%    40%    39%    38%    25%
    -----------------------------------------------------------------
    Save it for my Heirs       8%     6%     8%     8%     8%    20%
    -----------------------------------------------------------------
    Spend it on a House       14%    18%    14%     8%     4%     1%
    -----------------------------------------------------------------
    Share it with Others       3%     2%     4%     6%     7%    12%
    -----------------------------------------------------------------
    Retire                     2%     4%     5%     5%     6%     5%
    -----------------------------------------------------------------
    Spend it on a Vacation     2%     0%     2%     3%     4%     5%
    -----------------------------------------------------------------
    Pay off Debts              1%     2%     3%     4%     1%     -%
    -----------------------------------------------------------------
    Give to Charity            1%     1%     0%     3%     1%     -%
    -----------------------------------------------------------------
    Other                      2%     0%     -%     1%     1%     -%
    -----------------------------------------------------------------
    Will Not Receive Any       -%     0%     2%     5%     8%    13%
    -----------------------------------------------------------------
    I don't know/I prefer
     not to answer            41%    26%    22%    20%    22%    21%
    -----------------------------------------------------------------
    





For further information:

For further information: Deb McGrath, Marketing Director,
dmcgrath@secor.ca, (416) 204-7709; Patrick Erlich, Media Profile,
Erlich@mediaprofile.com, (416) 504-8464

Organization Profile

SECOR CONSULTING

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890