With everyone else heading back to school, it
may be time for boomers to crack open their books for some serious retirement
planning. A recent poll for Manulife Investments suggests older Canadian boomers
are not as mathematically savvy as they need to be - especially when it comes
to their income after they retire.
"We've found aging boomers accept they'll need to adjust their lifestyle
when they retire. Unlike their retired counterparts, most working boomers -
56 per cent - appear far more open to return to work if their finances dictate
the need," explains Bob Tillmann, VP Marketing and Business Development,
Manulife Investments. "Yet, at the same time, boomers are quite uncertain
about how much retirement income and cash flow they'll have and need."
The poll(1) by Maritz Research and commissioned by Manulife Investments
of 900+ Canadians, aged 50 - 70, reveals that 63 per cent of those not yet
retired expect cash flow may or will be tighter - with half of these Canadians
admitting that they do not know how much they will have to curb spending.
Among those already retired, 47 per cent report their cash flow is indeed
tighter.
"Their uncertainty around financial preparedness in this study is very
consistent with previous research," Tillmann further explains.
"In a similar study(2) among Canadians aged 47 - 64, an overwhelming
number of aging boomers - 85 per cent - said they felt only somewhat
financially prepared, were not at all prepared, or simply didn't know."
The New Retirement Math
Brushing up on your math skills is critical to successful retirement,
according to York University Professor Moshe Milevsky, author of a new book
The Calculus of Retirement Income.
"Aging Canadians must familiarize themselves with a number of math
concepts," he says. "We tend to underestimate our longevity and most of us
believe we'll need around 15 years of retirement income(2). Once you're in
your 70s, life expectancy is greater than 80, not less," says Milevsky.
"Moreover, Canadians must better understand in numerical terms how randomness
can amount to unexpected things that negatively affect the value of retirement
income."
Milevsky is studying impact of the Retirement Risk Zone - the critical
time period just before and after retirement - to quantify its impact on an
investor's nest egg. During this key time window, a downturn in the markets -
even if temporary - can leave retirees with less money than they need.
"Canadians must be aware of and more proactively plan for this - together
with their financial advisors they definitely need to do the math," he says.
His new research findings on the "retirement risk zone" and its impact in
Canada are expected to be released during the next month.
The "A" List
The Manulife Investments survey highlighted three factors that top
boomers' wish lists as they prepare for retirement. These include: emergency
access to savings; steady, predictable income; and preserving their nest egg.
Tillmann explains that topping their list of key retirement concerns are:
losing money on investments, unexpected healthcare costs and high inflation.
"Accommodating all these factors, coupled with boomers' desire to also
grow their asset base in retirement definitely puts a tall order on us in
terms of product innovation," he says. "We believe boomers need products to
navigate retirement transition, particularly the retirement risk zone, that
will put them in a better position to secure and grow their retirement income
going forward."
About Manulife Financial
Manulife Financial is a leading Canadian-based financial services group
serving millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily through John
Hancock in the United States, the Company offers clients a diverse range of
financial protection products and wealth management services through its
extensive network of employees, agents and distribution partners. Funds under
management by Manulife Financial and its subsidiaries were Cdn$370 billion
(US$332 billion) as at June 30, 2006.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE,
and under '0945' on the SEHK. Manulife Financial can be found on the Internet
at www.manulife.com.
(1) Manulife Investments Research
Poll conducted by Maritz Research in July 2006 among 902 Canadians
aged 50-70. Margin of error +/-3.3%, 19 times out of 20.
(2) The Aging Baby Boomer Canada 2006 - Strategic Guidance
Consulting Inc.
Online survey conducted in November 2005 with a national
representative sample of 1,000 Canadians aged 47-64 who currently
work full time. Margin of error +/- 3.1%, 19 times out of 20.
For further information: Media contact: Tom Nunn, Manulife Financial,
(519) 594-8578, tom_nunn@manulife.com; Diane Black/Lindsay Williams, PraxisPR,
(905) 949-8255, diane@praxispr.ca, lindsay@praxispr.ca
All of the above text is a press release provided by the quoted organization. TheMatureMarket.com accepts no responsibility for their accuracy.
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