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According to statistics Canada by 2030, close to one in four people in Canada will be 65 years of age or older. That compares to 15.3 per cent in 2013. Every week, almost 5,000 baby boomers are retiring and this adds up to more than 250,000 retirements a year.

This type of generational transformation will have profound implications on our workplaces, communities and governments considering the size of Canadian population and labor force.

However, for baby boomers themselves, are they financially prepared for this transformation? Many surveys say no. According to Franklin Templeton 2018 Retirement Income Strategies and Expectations (RISE) a shocking number of Canadians in the generation closest to retirement have no money saved for their golden years.

 

More Than Half (56%) Of Pre-Retiree Canadians Do Not Know How They Will Pay Medical Expenses In Retirement - Fraklin Templeton Retirement Income Strategies and Expectations (RISE)

 

A Fifth Of Canada's Working Baby Boomers Have Nothing Saved For Retirement, According to Survey - Huffingtonpost 05/11/2018

For those baby boomers already retired, about 20% of them are still making mortgage payments while 66% are carrying credit card debt

A Quarter Of Retired Canadians In Debt, Survey Suggests - CBC 02/24/2018

 

Investment Fees Do Matter

Fortunately some baby boomers have put a sizable amount of cash aside for their retirement.  Many baby boomers invest their money with 5 big banks as they advertise ‘all in one investment solution with stability, income and growth’ and often these banks are considered to be safe.

But Canadians pay little attention to investment fees with these solutions, which could be eating into their savings. Yes, fees are a fact of life. It’s impossible to invest money without paying some fees. The service providers who help you invest — even if you do it yourself via an online broker service — need to be paid for their work.

However stakes are high. To points out that a two per cent management fee on mutual funds typically cuts an investor's retirement fund by about half over a 35-year period.

Check out the story of a man who put away nearly $1 million at the bank only to realize that his investments actually earned less than three per cent and cost him more than $30,000 in fees over six years. His financial plan initially claimed that his money would earn ‘about six per cent in annual interest

Why bank employees with impressive but misleading titles could cost you big time - CBC 03/29/2017

 

Working With Advisors Who Works In Your Interst

A recent report by the Small Investor Protection Association found that there are 121,000 people registered as financial profesionals in Canada, and the vast majority of them are registered as salespeople licensed to sell financial investments. These sales people who often call themselves as ‘financial advisors’ are transaction based sales people and often fail to work with you to make sure you are well on your way to build financial legacy.     

Check out how a Toronto man lost $60,000 from his retirement saving by paying fees for financial advice he never got and one his broker isn’t legally allowed to provide.

Controversial Commissions - CBC 09/16/2019

 

Create Your Financial Legacy

Are you happy where you are financially? What matters the most for you?

Passive income? Time with family? Paying off your debt? Saving up for your kids college? Saving for retirement? 

Will you be happy if your future and your financial future stay the same way in next 10 years?

Let’s have a conversation! Contact me anytime for free consultation.

Legacy Council of Canada comprises of four divisions to fully support Canadians with financial goals and real estate based challenges. Legacy Council of Canada is four solutions under one roof working for the financial freedom of the client. Our aim is for our clients to live a great financial life by design.

To find out how you can leverage your existing portfolio please sign up for a free portfolio review.

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