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February 15, 2022

Canadians want flexibility when it comes to retirement income

Canadians have been bombarded with advice about how to save for retirement but, until recently, they’ve been left on their own when it comes time to tap their nest eggs.

Retire That’s why products offering the prospect of a guaranteed income in retirement have gained massive appeal, particularly in the aftermath of the most recent financial crisis.

Nonetheless, it appears that most of us want the best of both worlds when it comes to retirement income planning – a guaranteed income stream and the flexibility to access funds whenever they choose.

Retirees and pre-retirees alike are looking for guarantees, but are reluctant to make concessions, suggests a recent report from the BMO Retirement Institute.

The report identifies what Canadians believe are the important elements of a retirement income plan (flexibility to deal with unexpected events, maintaining current lifestyle, guaranteed income, not outliving their money), and examines why it will be difficult, if not impossible, for most to attain all of these elements without making sacrifices.

According to the report only 40% of those planning to retire in five years are willing to give up control over some of their retirement savings in order to receive guaranteed income for life.

As well, 67% of all respondents believe flexibility to deal with contingencies is more important than ensuring a predictable retirement income for life.

What’s your plan when it comes to retirement spending? Will you look to annuities and GMWB products or try to handle things on your own?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...