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Royal Bank of Canada
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Royal Bank outlines results of retirement poll

2019-07-18 07:16 ET - News Release

Mr. Rick Lowes reports

NOT READY FOR PRIMETIME? MANY CANADIAN BOOMERS WORRY ABOUT A RETIREMENT SAVINGS SHORTFALL: RBC POLL

According to the Boomers surveyed for the latest Royal Bank of Canada retirement myths and realities poll, conducted by Ipsos, the savings gap varies widely. On average, those with investable assets of over $100,000 want to save $949,000 and so far, are falling over $275,000 short. Those with investable assets of less than $100,000 want to save, on average, $574,000 and are over $500,000 away from their goal. (Investable assets typically include cash, bank account funds and retirement account funds.)

What is not clear is how realistic either of these savings goals are. "When you peel back the layers, many Boomers worry about their savings shortfall because they just don't know where to start," comments Rick Lowes, vice-president, retirement strategy, Royal Bank. "The best approach is to start with expectations including: The lifestyle you hope to lead in retirement, retirement income options and then build a plan to get you there."

There are also a number of actions you can take ahead of retirement, including:

  • Choosing whether to delay applying for your Canadian pension plan (CPP; QPP in Quebec) and old age security (OAS) once you become eligible, to benefit from increased payments at a later age;
  • Determining all the sources of income you will be able to draw upon in retirement;
  • Taking full advantage of your RRSP and TFSA options;
  • Ensuring you have tax-smart strategies and the right investments -- and asset mixes -- to help maximize your savings.

The Royal Bank poll found that not-yet-retired Boomers (1) are considering a number of options to boost their retirement income, including:

  • Downsizing/moving -- 52 per cent;
  • Working in retirement -- 41 per cent;
  • Borrowing against home equity -- 25 per cent;
  • Relying on an expected inheritance -- 21 per cent;
  • Hoping to win the lottery -- 3 per cent.

"No one should be relying on an inheritance or a lottery win. We also don't want anyone feeling discouraged by unrealistic savings goals or thinking they don't have enough time. Concerns like these can be overcome by taking control of your finances," continues Mr. Lowes. "There could be some tough choices ahead. A half-hour conversation with a financial planner can help you get started and shape your retirement plans to make a real difference to your financial future."

                               REGIONAL AND GENDER COMPARISONS
                        Non-retired Canadians aged 50 and over (1)
  
RESPONSE                                                Can    BC    AB  SK/MB      ON   QC    AC      M     F   
$ amount -- how much I think I'll have to save for 
my retirement                                          949K  958K 1.1MM   918K  1.01MM 806K  788K 1.05MM  872K 
How much I've already saved for my retirement          674K  719K  821K   709K   719K  606K  331K   754K  608K 
Percentage -- yes, when retired I expect to have debts   19    21    16     24     16    16    29     20    18  
I'd downsize/move when retired if I need more income     52    57    56     46     54    43    56     52    53  
I plan to work once retired                              41    48    43    47*     40    29    47*    44    39  
I have no plans to work once retired                     50    43    47    42*     50    63    45*    46    53  
I don't ever plan to retire                               9     9     9     12*     10    8     8*    11     8   
Yes I have a financial plan...                           78    74    83    79*     79    75    81*    81    75    
and my  plan is in my head                              -27   -30   -21    -21*   -28   -23   -34*   -32   -23  
No, I don't have a financial plan   yet                  22    26    17    21*     21    25    19*    19    25  

(1) With investable assets of over $100,000.

* Small sample size.


  

About the 2019 Royal Bank retirement myths and realities poll

These are the findings of the Royal Bank 2019 retirement myths and realities poll, conducted by Ipsos between April 2 to April 8, 2019. For the overall survey, a sample of 2,000 Canadians aged over 50 was interviewed via the Ipsos I-Say panel and non-panel sources. Quotas and weighting were applied to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. For this release, the data referenced are among a sample of 900 aged over 50 who are preretirees with investable assets of $100,000 or more, and 100 aged over 50 who are preretirees with investable assets of less than $100,000. The credibility of Ipsos on-line polls is measured using a credibility interval. In this case the results are considered accurate to within plus or minus 3.5 percentage points, 19 times out of 20, for the full sample of preretired Boomers, plus or minus 3.7 percentage points for those with investable assets of over $100,000, and plus or minus 11.2 percentage points for those with investable assets of less than $100,000.

About Royal Bank's retirement and financial planning resources

Royal Bank retirement planning can help you plan for the 30 years or more you may spend in retirement. This website also includes links to financial planners/investment and retirement planners who can help you determine the retirement lifestyle you hope to live, the sources of income you will be able to draw from when you retire, the advantages RRSPs and TFSAs offer for your retirement and considerations to make before applying for your CPP/QPP. The bank's financial advice is complemented by a free service unique to Royal Bank -- MyAdvisor -- which connects clients to advisers and financial planners for face-to-face, real-time video or phone meetings, where together they can view and adjust a client's comprehensive financial picture.

© 2019 Canjex Publishing Ltd. All rights reserved.