Baby boomers not planning to downsize their lifestyle in retirement

    - Only one in five baby boomers has a retirement income plan, and many
    not anticipating increased costs in retirement -

    TORONTO, Feb. 19 /CNW/ - Over two-thirds of working Canadian baby boomers
have no plans to downsize their lifestyles in retirement according to the
2007/2008 Fidelity Canadian Retirement Survey. The majority of working
Canadian baby boomers plan to maintain or even increase their standard of
living in retirement.
    "Fidelity's research shows that many baby boomers have big plans for
retirement including retiring early and leading very active lives in
retirement," said Peter Drake, Vice President, Economic and Retirement
Research, Fidelity Investments Canada ULC. "However, as the median retirement
age drops and life expectancy increases, some boomers could have retirements
as long as their working lives. Unfortunately, not all boomers are planning
and saving for the longer and more active retirement they want."
    The third annual Fidelity Canadian Retirement Survey reveals that 64% of
Canadian baby boomers are planning to maintain their current standard of
living once they retire. An additional six per cent are planning to increase
their standard of living, while only 22% of boomers plan on downsizing in
retirement. Conversely, 47% of Canadian retirees surveyed indicated that they
continued to live like they did before retirement, while an additional 42%
downsized their standard of living after retiring

    Planning for retirement and having a plan in retirement

    While many boomers have big plans for retirement, not all will be able to
afford the life they want in retirement. The Fidelity Retirement Index,
released in October 2007, shows that boomers are only on track to replace 55%
of their pre-retirement income once they retire. This means that some boomer
households will be taking a 45% paycut in retirement which could force them to
reconsider their retirement goals.
    The Fidelity Canadian Retirement Survey also shows that only one in five
baby boomers (23%) has a retirement income plan that clearly tells them where
their money will be coming from in retirement and where it might be going.
    "Planning for your retirement involves more than saving for it," said
Drake. "Boomers and retirees should have a retirement income plan that clearly
outlines their income sources and plans for future expenses."

    Where the money might go in retirement

    While many of those surveyed want to maintain or even increase their
standard of living in retirement, they realize that it can come at a cost. The
majority of baby boomers (62%) believe they will be spending less in
retirement than they currently are which is consistent with spending habits
reported by retired Canadians.
    When examining where they believe their money might go, 45% of boomers
believe they will spend less on housing costs for their primary residence in
retirement. However, retirees report that the opposite is true with 69% of
retirees saying that they have actually spent the same or even more on housing
costs in retirement. The vast majority of boomers (84%) are anticipating that
their health care costs will remain about the same or rise in retirement which
is consistent with retirees' current spending habits. As well, 66% of boomers
expect to spend the same or more on vacations, vacation properties and hobbies
in retirement compared to 56% of retirees who have done so in retirement.
    "Fidelity's research indicates that the majority of Canadian baby boomers
believe that their health care spending will remain the same or increase in
retirement," said Drake. "However, there are other areas, such as potentially
rising housing costs, that boomers need to consider in their retirement
planning. Just because you are retired does not mean that down the road you
won't need to spend money on upkeep and repair on your home."
    Overall, boomers and retirees that currently have a retirement income
plan are more likely to report that they have anticipated future spending such
as health care, housing costs, vacations and home renovations. For retirees
with a retirement income plan, they are twice as likely to report having an
increased standard of living in retirement as those without a plan.
    "Having a saving plan for the years leading up to retirement combined
with an income plan in retirement will help you live the life you want after
you stop working," added Drake.

    About the Fidelity Canadian Retirement Survey

    The 2007-2008 Retirement Survey was conducted by The Strategic Counsel.
The survey was conducted on-line from November 27 to December 10, 2007 among a
representative sample of 1000 adult Canadians 45 years and older. In order to
participate in the study, respondents were required to be the person in the
household with the main responsibility or shares the responsibility for
savings and investing decisions.
    The results were weighted to ensure the sample's regional and
age/household income composition reflects that of the actual Canadian
population of those 45 years +, according to the 2001 Census data. Results for
the total nationwide proportionate sample of 1000 are considered accurate to
within +/-2.6 percentage points, 19 times out of 20. The margin of error will
be larger within regions and for other sub-groupings of the survey population.

    About Fidelity Investments Canada ULC

    Fidelity Investments Canada ULC is the country's eighth largest mutual
fund company and part of the Fidelity Investments organization of Boston, one
of the world's largest providers of financial services. In Canada, Fidelity
manages a total of $42 billion in mutual fund and corporate pension plan
assets. It offers Canadian investors a full range of domestic, international
and income-oriented mutual funds and portfolios. These include the Fidelity
Income Replacement Portfolios(TM) which offers integrated investment and
withdrawal strategies for Canadians in and approaching retirement. Fidelity
also offers several tax-smart solutions for non-registered accounts including
the award-winning Fidelity Tax Smart Withdrawal Program(TM) (Fidelity
T-SWP(TM)). Fidelity funds are available through a number of advice-based
distribution channels including financial planners, investment dealers, banks,
and insurance companies. Fidelity Investments also administers defined
contribution plans and manages defined benefit assets on behalf of corporate
clients across Canada.

For further information:

For further information: Chris Pepper, Director, Media Relations,
Office: (416) 307-5388, Mobile: (416) 795-7762, Email:

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