Despite an improvement in retirement security scores for developed countries, a significant number of Canadians are worried about the impact of inflation on their retirement plans, according to the Natixis Investment Managers' Global Retirement Index released this month. The index, which considers economic conditions like employment growth, wage gains and interest rates, showed that nearly all developed countries had higher scores than the previous year.
However, this optimism doesn't reflect the concerns of Canadians. A survey of those with at least $100,000 in investable assets found that 32% of working respondents believe inflation is thwarting their retirement dreams. This sentiment has also grown over time, with 38% feeling it would take a miracle to retire securely, an increase from 25% in 2021.
"Saving for retirement was already a challenge. Now, as people think about the impact of higher prices, longer lives, and the potential for reduced retirement benefits, many are doubting whether they will be able to put all the pieces together," said Dave Goodsell, head of the Natixis Center for Investor Insights.
Inflation topped the list of concerns for retirees and working individuals alike. Around 80% of respondents felt recent history has underscored how big a threat inflation poses to their retirement security. Furthermore, fears about government benefit cuts were also prevalent; over 70% worried that high public debt might lead to reduced retirement benefits in the future.
The study also revealed that about 65% of working Canadians anticipate having to make tough choices due to these concerns. Roughly half expect they will have to live frugally during their retirement years. Meanwhile, 20% believe they will need to continue working and 21% anticipate having to sell their homes.
Despite these concerns, Canada's ranking for retirement security has improved. The country placed 12th on Natixis' annual index among 44 countries, up from its previous position. This improvement was attributed to advances in financial security during retirement and material well-being, despite a decline in health and quality of life.
The index also considered factors beyond finance when evaluating retirement security, including access to healthcare, climate conditions, state of governance, and general population happiness. For the second consecutive year, Norway topped the ranking, followed by Switzerland, Iceland, and Ireland.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.