September 05, 2021

Longer life expectancy poses threat to pension plans: report

New figures confirm that life expectancy in Canada has increased — a trend that poses a threat for pension plan sponsors and, ultimately, for plan members.

According to updated mortality tables recently released by the Canadian Institute of Actuaries, the life expectancy of a 60-year-old male today has increased by 2.9 years — from 24.4 to 27.3 years — compared to pension mortality tables currently in use.

The life expectancy of a 60-year-old woman has increased by 2.7 years — from 26.7 to 29.4 years.

All of which is good news, of course, unless you're the one who has to figure out how to pay for those extra golden years.

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July 08, 2021

When it comes to finances, not all boomers are in the same boat

There's a big difference between still being in your 50s and having said goodbye to 60 -- particularly when it comes to money.

Although often lumped together under the same category, subsets of the boomer cohort have led fairly different lives, have diverging priorities and subsequently varying levels of retirement preparedness, according to a recent report by the Insured Retirement Institute.

The biggest differences between early (mid-60s) and late (mid-50s) boomers has been the migration from the defined benefit pension plan (DB) to the defined contribution (DC) plan that has left many of those not yet retired on their own when it comes to investing.

The 'it's all yours, buddy' plans that many late boomers are relying on present them with a unique challenge when compared with the secure income plans their older siblings are living off of.

For this reason, late boomers may want to look into annuities in order to provide them with a guaranteed source of income throughout their years in retirement, the report states.

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April 25, 2021

Do you think you'd buy an annuity in retirement?

Transition Boomers — those ages 55 to 65 and closing in on retirement — are more interested in protecting their retirement savings with a guaranteed return even though they realize the stock market may offer better returns over the long haul, according to to a recent survey.

87% say they'd be more interested in a financial product with a 4% return, which is guaranteed not to lose value, over one with an 8% return but which is subject to market downturns.

Despite this, only 25% say they currently own an annuity, a product that can help answer the demand for guarantees, largely because they don't feel comfortable with them, it seems.

75% of admit to a general lack of understanding, saying either “there’s a lot about annuities I’m not sure about” (37%) or “I haven’t got a clue” (38%).

And that's too bad, according to a recent C.D. Howe Institute report, which suggests that more Canadians approaching retirement should be looking at annuities.

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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...