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Health forcing early retirements

Monday October 27, 2014 Written by 
Many Canadians are retiring ahead of schedule, and poor health is the primary factor forcing these retirees to leave the workforce early.

Seven in 10 retired Canadians (69 per cent) did not finish their career as planned or expected, according to the results of a new Ipsos Reid survey conducted on behalf of Sun Life. Among those who did not retire as planned, health reasons (41 per cent) was cited as the primary reason for retiring early.

Poor health hurts finances

The nearly half of Canadians (45 per cent) who have experienced a serious health event should take note that financial woes can follow on the tails of a serious health event. Among those who've experienced a serious health event, four in 10 (42 per cent) experienced financial hardship, and 25 per cent indicated that their savings were reduced or depleted due to the event.

Though two in three Canadians (66 per cent) indicate that deteriorating health is a worry for them when thinking about a long life expectancy, just one in five (22 per cent) have made plans in their retirement savings for extra healthcare expenses related to chronic diseases or conditions.

Just seven per cent of Canadians are confident they can handle any and all of these expenses.

Not having this peace of mind about future expenses for retirement has caused many Canadians to worry when thinking about:

  • The cost of drugs and medical treatments in retirement (53 per cent)
  • Being in a long-term care facility longer than they are financially prepared for (47 per cent)
  • Outliving their retirement savings (45 per cent)

Three-quarters of Canadians (76 per cent) indicate that they feel an uncomfortable level of stress about a variety of factors, mainly related to their financial situation, while just one in four (24 per cent) say they don’t feel any such stress.

The top three stressors for Canadians include:

  • Personal and household finances (41 per cent)
  • Trying to maintain a budget (31 per cent)
  • Unexpected expenses (30 per cent)

A helping hand into retirement

One way that Canadians under financial duress can help ease their worries is by working with a financial advisor or accredited professional. Results from the 2014 Sun Life Canadian Unretirement Index conducted by Ipsos Reid reveals that Canadians who have an expert to help with their finances are more likely to finish their careers as planned (40 per cent vs. 25 per cent who do not work with an expert).

Four in five Canadians who work with an advisor (82 per cent) are confident they will be able to take care of their medical expenses in retirement as opposed to two in three (66 per cent) who don’t work with an advisor and have this confidence in fulfilling these medical expenses.

These are some of the findings of an Ipsos Reid poll conducted between June 19 and July 2, on Sun Life Financial. For this survey, a sample of 2,799 Canadians between the ages of 18 and 80 was interviewed online. The poll is accurate to within +/- 2.1 percentage points, 19 times out of 20, had all Canadian adults been polled.

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